Judge Rules Trump Administration Retaliated Unlawfully Against AI Startup Anthropic

A U.S. district judge has ruled that the Department of Defense illegally designated Anthropic, the AI startup that created the Claude model, as a supply‑chain risk, describing the move as "illegal and baseless."

The lawsuit, filed by the company, argues that Defense Secretary Pete Hegseth exceeded his authority by making the designation following Anthropic’s refusal to let the military use its models for surveillance or autonomous weapons. Judge Rita Lin warned that citing national security does not grant a blank check to punish critics.

Anthropic stated that it is eager to "work productively with the government to harness AI for our national security so all Americans benefit from this technology," while also affirming its right to free speech.

In a separate filing, the judge noted that the Pentagon’s order to companies that do business with the U.S. military to boycott Anthropic was unlawful. The designation, first applied in February, was unprecedented for a U.S. company.

The court found that the Pentagon's action aimed to "cripple" the company and "chill public debate" about military use of AI, labeling it a classic First Amendment retaliation.

The White House previously called Anthropic "a radical left, woke company" attempting to curb military activity, while the Pentagon defended its stance by asserting that private companies cannot limit military action. Anthropic’s lawsuit claims the actions harmed its business and violated its freedom of speech.

For more details, see the Pentagon’s designation of Anthropic as a supply‑chain risk here.