A U.S. District Judge on Thursday blocked the Department of Defense from blacklisting the artificial intelligence company Anthropic. The ruling pauses a Pentagon designation that labeled the maker of the Claude AI model a national security supply-chain risk, a status intended to protect military systems from potential sabotage or infiltration by foreign adversaries.
The legal dispute began after Defense Secretary Pete Hegseth applied the risk designation to Anthropic, which effectively barred the company from securing certain military contracts. The move followed Anthropic's refusal to allow the U.S. military to use its Claude models for autonomous weapons or domestic surveillance. Anthropic argued that its models were not reliable enough for battlefield use and that surveillance use would violate rights, while the Pentagon maintained that private firms should not dictate military capabilities.
In a 59-page order, U.S. District Judge Rita Lin described the Pentagon's decision as "illegal and baseless." Lin stated that a general invocation of national security does not permit the government to retaliate against critics. Anthropic had alleged in its March 9 lawsuit that the government violated its First Amendment right to free speech and Fifth Amendment right to due process, claiming it was never given a chance to dispute the designation.
The Justice Department argued in court filings that the designation was not based on Anthropic’s views, but on its refusal to accept specific contractual terms. Federal lawyers stated that the company's restrictions on AI use created uncertainty that could risk disabling military systems during active operations. The Pentagon did not immediately comment following the ruling, while Anthropic stated it remains focused on working with the government to use AI for national security.
For the broader technology sector and federal workers, the decision addresses whether the government can use "supply-chain risk" labels to penalize companies that set ethical or safety boundaries on the use of their software. A permanent blacklisting would have meant that military agencies could not integrate Claude AI into their workflows, potentially affecting how data is processed or analyzed across various defense departments. The ruling provides a temporary check on executive authority, suggesting that agencies must provide a factual basis and due process before barring domestic companies from government work under this specific statute.
The day-to-day impact for the military and Anthropic will be determined by whether the government appeals the decision or attempts to re-designate the company using different administrative procedures. If the block remains in place, Anthropic may resume competing for military contracts that were previously restricted. The case establishes a precedent regarding the "empty invocation of national security" as a justification for administrative actions against private entities. A separate court date for the company's second lawsuit regarding civilian contracts has not yet been specified, and the Pentagon's next legal steps following Judge Lin's order are not yet known.