US court rules Pentagon ban on Anthropic unlawful, says firm was punished for criticising government

A US federal judge has ruled that sanctions imposed by the Trump administration on AI company Anthropic were unlawful, finding that the Pentagon’s action was aimed at retaliating against the company for publicly challenging government policy.

Judge Rita Lin, in a 59-page decision issued on Thursday, found that the Department of Defense had violated Anthropic’s due process rights under the Fifth Amendment. She also overturned the company’s designation as a national security “supply-chain risk”.

"The empty invocation of national security is not a blank check to punish and retaliate against government critics," AFP cited Lin as saying in her ruling.

The court has also ordered the Pentagon to withdraw guidance, directives, communications and instructions issued against Anthropic.

Why did the Pentagon target Anthropic?

The dispute centres on how the US military should use artificial intelligence. In February, the Pentagon designated Anthropic, the company behind Claude, as a national security supply-chain risk.

The move followed a disagreement over the military’s proposed use of Claude. Anthropic had refused to permit the chatbot to be used for US surveillance or autonomous weapons, citing concerns over AI safety and civil liberties.

The designation restricted the company’s access to certain military contracts.

Anthropic subsequently accused Defense Secretary Pete Hegseth of exceeding his authority. In its lawsuit filed in a California federal court, the company argued that being cut off from military contracts could result in billions of dollars in lost business and cause reputational damage.

Anthropic's concerns over AI use

Anthropic has maintained that current AI models are not sufficiently reliable for use in autonomous weapons. The company has also opposed domestic surveillance, arguing that it could violate individual rights.

The Pentagon, meanwhile, has argued that private companies should not be able to place restrictions on military operations.

Anthropic faces another legal battle

Anthropic was the first US company to be publicly designated a supply-chain risk under a government procurement law designed to protect military systems from potential foreign sabotage.

The company is also involved in a separate case in Washington, DC, challenging another Pentagon supply-chain risk designation. That case could affect its ability to secure civilian government contracts.