A U.S. federal court ruled that the Department of Defense’s attempt to classify AI company Anthropic as a “supply chain risk” was unlawful, in a decision that prevents the continuation of measures that obstructed federal agencies’ use of the company’s products. Judge Rita Lin issued the ruling in a 59-page decision.
The court found that the government’s actions were retaliatory in nature because of Anthropic’s positions on the use of artificial intelligence, violating the protection of freedom of expression provided by the First Amendment to the U.S. Constitution. It also concluded that the failure to give the company an opportunity to challenge its designation violated its right to due process under the Fifth Amendment.
Background to the Dispute Between Anthropic and the Pentagon
The dispute began after Anthropic refused to allow Claude models to be used for mass-surveillance activities targeting U.S. citizens or in fully autonomous weapons systems. The company said that current AI models are not reliable enough for safe use in autonomous weapons, and that mass surveillance within the United States conflicts with fundamental rights.
In contrast, the Pentagon said that private companies cannot impose restrictions on the purposes for which the military uses its AI systems. After negotiations between the two sides failed, Secretary of Defense Pete Hegseth designated the company in February as a “supply chain risk.” The description was primarily used for foreign companies believed to pose a threat of infiltrating or sabotaging U.S. military systems, making Anthropic the first U.S. company to be explicitly designated in this manner.
What Changes in Practice?
The court overturned the designation and ordered the withdrawal of instructions barring federal agencies from using Anthropic products. As a result, the measures that were temporarily halted in March are permanently prohibited under the ruling, which took effect immediately. However, the decision does not compel the Department of Defense to resume using Claude models or enter into a new contract with Anthropic; the department retains the authority to choose the AI providers with which it works.
Editorial Analysis from certi.news
The ruling is significant because it sets legal limits on the use of national-security justifications against a U.S. company because of its position on controls governing the use of AI. But it does not resolve the broader dispute over the conditions for using models in surveillance or autonomous weapons, nor does it grant Anthropic an automatic right to contract with the Pentagon.
Anthropic said it welcomed the ruling and was prepared to continue working with the government toward the responsible use of AI in national security. At the same time, the government may appeal the decision, while a second lawsuit filed by the company in Washington over a separate designation that could lead to its exclusion from government civilian contracts remains unresolved.