Judge rules Pentagon illegally targeted AI firm Anthropic over criticism
Judge Lin ruled the Pentagon illegally targeted Anthropic for criticizing its AI stance. The ruling could reshape how AI firms handle government contracts and military ethics.
A federal judge ruled Thursday night that the Pentagon acted illegally when it labeled AI company Anthropic a supply chain risk, a designation the government imposed after the company criticized the Defense Department's stance on artificial intelligence use in warfare.
U.S. District Judge Rita Lin, an appointee of former President Joe Biden, wrote in a 59-page order that the Pentagon's actions “were based on a desire to make a public example out of Anthropic for its ‘arrogance’ in criticizing the government, not based on any articulable basis to believe that Anthropic would actually sabotage its model.”
The dispute erupted in February when President Donald Trump and Defense Secretary Pete Hegseth accused Anthropic of endangering national security and designated the company a supply chain risk. Anthropic CEO Dario Amodei refused to back down over concerns the company's products could be used for mass surveillance or autonomous armed drones.
An Anthropic spokesperson said in a statement that the company welcomes the ruling: “We remain focused on working productively with the government to harness AI for our national security so all Americans benefit from this technology.” The White House did not immediately respond to a request for comment.
Lin wrote that neither the Constitution nor the federal statute the government invoked allows them to “impose sweeping penalties based principally on Anthropic’s critique of the Administration’s views.”
Anthropic sued the Pentagon in March, calling the supply chain risk designation an “unlawful campaign of retaliation” over its refusal to allow unrestricted military use of its technology. The legal battle intensified an unusually public dispute over how AI can be used in warfare and mass surveillance.
The ruling has direct implications for other AI companies navigating government contracts. Rival OpenAI, maker of ChatGPT, struck its own Pentagon deal just hours after the government punished Anthropic for its stance. Both companies are preparing for initial public offerings. The Pentagon’s approach to AI supply chain risks could affect how other firms balance government work with ethical constraints on military applications.
Earlier in the proceedings, Lin temporarily blocked the Pentagon from labeling Anthropic a supply chain risk and blocked enforcement of Trump’s social media directive ordering all federal agencies to stop using Anthropic and its chatbot Claude. In a July 30 hearing, Lin said the government's position was “really troubling” to her and “at odds to me with the First Amendment.” She said the record had “gotten worse for the government” over time.
Department of Justice lawyers argued in that hearing that AI models are “so staggeringly enormous and opaque” that the Defense Department cannot evaluate them the same way it would a physical piece of hardware. Anthropic lawyer Michael Mongan said the government's actions “profoundly harm Anthropic” and “threaten more broadly to chill speech and debate on a very important issue.”
Anthropic has a separate, narrower case pending in the federal appeals court in Washington, D.C., involving a different rule the Pentagon is using to try to declare the company a supply chain risk.
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