US Judge Rules Pentagon "Illegally Retaliated" Against AI Firm Anthropic in Landmark Ruling

A US federal judge has ruled that the Department of Defense acted unlawfully when it designated AI startup Anthropic a "supply-chain risk" — a status normally reserved for firms based in countries that threaten the United States — calling the move "illegal and baseless" and a likely violation of Anthropic's First Amendment rights.

US District Judge Rita Lin said in the ruling that invoking national security was "not a blank check to punish and retaliate against government critics," and that the Pentagon had unlawfully ordered companies that do business with the US military to boycott Anthropic after the Claude maker refused to allow its models to be used for domestic surveillance or autonomous weapons. Anthropic had argued in its lawsuit that Defense Secretary Pete Hegseth had overstepped his authority and that the designation — imposed in February and the first time a US company had been publicly branded a supply-chain risk — had "unprecedented and unlawful" consequences for its business and its right to free speech.

Judge Lin had signalled her view of the case earlier, telling the court the government appeared to be trying to "cripple" the company and "chill public debate" over military use of AI. "This appears to be classic First Amendment retaliation," she said at the time, according to the BBC's account of the proceedings. The Pentagon had argued that private companies should not be able to constrain military action, while the White House previously called Anthropic "a radical left, woke company attempting to control military activity" and said the military was bound by the US Constitution "not any woke AI company's terms of service."

Anthropic welcomed the ruling and said it was focused on "working productively with the government to harness AI for our national security so all Americans benefit from this technology." The BBC said it had contacted the Pentagon and the White House for comment on the decision. The case has emerged as a high-profile test of how far Washington can go in pressuring AI labs whose terms of service conflict with military priorities, and the ruling is likely to embolden other US technology firms pushing back against government demands to relax safeguards on defence applications.

**Sources:** BBC