A federal judge in San Francisco ruled Thursday that the Trump administration illegally retaliated against the artificial intelligence company Anthropic. U.S. District Judge Rita Lin found that the administration violated the First Amendment and the Due Process clause of the Fifth Amendment by punishing the firm for its public stance on AI safety. The ruling permanently bars the administration from enforcing rules that sought to cut off Anthropic from the federal government.
The legal dispute originated in March 2026 after negotiations between Anthropic and the Pentagon regarding the use of the Claude AI model collapsed. Anthropic requested that its technology not be used for fully autonomous lethal weapons or the mass surveillance of Americans. The Pentagon insisted on using the technology for "all lawful uses," leading Defense Secretary Pete Hegseth to designate Anthropic as a supply chain risk. Hegseth stated at the time that U.S. forces would not be "held hostage by the ideological whims of Big Tech."
In her 59-page ruling, Judge Lin stated that the government's actions were based on a desire to make a public example of Anthropic for criticizing the administration rather than a legitimate national security concern. While the judge noted that the Department of War is free to select its own vendors, she wrote that the broad penalties imposed were "illegal and baseless." The Department of Justice had argued that speech during contract negotiations is not protected, but Lin rejected that position as unsupported.
For federal agencies and private defense contractors, this change means the administration is barred from enforcing the restrictions that had prevented the use of Anthropic's tools since earlier this year. While the California ruling is final for this specific suit, a separate legal challenge filed by Anthropic is currently pending in the D.C. Circuit Court of Appeals, where a three-judge panel heard arguments in May. The Department of Justice and the Department of Defense did not immediately respond to requests for comment on the decision. Further updates are expected as the D.C. court releases its own decision at a later date.