A federal judge ruled on Thursday that the Pentagon’s decision to blacklist Anthropic earlier this year was unconstitutional, handing the AI lab a significant victory in its ongoing dispute with the Trump administration. The ruling came in a lawsuit filed in March in a California district court, where Anthropic accused the administration of retaliating against the company for setting limits on how its technology could be used by the military. Judge Rita F. Lin of the northern district of California wrote that the actions constituted “unlawful retaliation in violation of the First Amendment,” and she rejected the government’s national security rationale as a justification for punishment.
Judge Lin also determined that Defense Secretary Pete Hegseth’s move to designate Anthropic a “supply chain risk” was arbitrary and capricious. While acknowledging that the Department of War is free to choose its own AI vendors, she stated that the broad measures placed on Anthropic were illegal and baseless. The ruling marks the latest chapter in a monthslong confrontation between the AI company and the administration over military use of its technology.
The conflict began last winter when Hegseth sought to renegotiate all AI labs’ contracts with the military, aiming to permit the Pentagon to use AI for “any lawful use.” Most labs accepted the new terms, but Anthropic refused, insisting on two restrictions: no use of its AI for mass surveillance of Americans and no use for lethal autonomous weapons, which are systems capable of killing targets without human oversight. That refusal triggered escalating pressure, including insults from Department of Defense officials and an ultimatum from the administration.
Less than 24 hours before the ultimatum expired, Anthropic CEO Dario Amodei issued a statement defending the company’s position. He said Anthropic had never objected to specific military operations or tried to limit its technology on a case-by-case basis, but that in a narrow set of situations, the company believed AI could undermine rather than defend democratic values. Following that statement, the Pentagon labeled Anthropic a supply chain risk, a designation typically reserved for national security threats, and replaced its involvement with deals involving seven other AI labs, including Google, Microsoft, OpenAI, and SpaceX.
Anthropic then filed its lawsuit, and in March, Judge Lin temporarily blocked the blacklist. In that earlier order, she noted that the Department of War’s records showed the designation was based on Anthropic’s “hostile manner through the press,” and she described punishing the company for bringing public scrutiny to the government’s contracting position as classic illegal First Amendment retaliation. On Thursday, Anthropic spokesperson Danielle Ghiglieri welcomed the court’s ruling, saying the company remains focused on working productively with the government to harness AI for national security so all Americans can benefit from the technology.
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