Judge rules Pentagon's blacklisting of Anthropic unlawful

US District Judge Rita Lin, in the Northern District of California, granted Anthropic summary judgment against the Department of War, ruling that the government’s designation of the company as a “supply chain risk to national security” — and the orders barring federal agencies and defence contractors from doing business with it — were unlawful. The decision was the merits successor to the preliminary injunction Lin had issued in March, and it resolved, against the government, the core question that ruling had left open: whether a national-security designation could be used to punish a contractor for its public disagreement with the administration.

Lin found the administrative record “slim” — a single four-page memorandum supplied the entirety of the government’s rationale, and the government had by then abandoned its original theory that Anthropic could plant a backdoor in deployed models, conceding that Claude was no riskier than any other “black box” system. That left only “trust”: the government argued that Anthropic’s “increasingly hostile manner through the press” meant it could not be relied on to ensure the integrity of its models. Lin held that the challenged actions had instead been driven by a desire to make a public example of the company for its criticism of Department of War AI-use policy, pointing out that Secretary Pete Hegseth had days earlier proposed invoking the Defense Production Act — which would have treated Anthropic as essential — and that the department kept pursuing contracts with it afterwards.

None of that is consistent with a genuine fear that Anthropic is a saboteur who would poison its software to harm national security.

— Order on cross-motions for summary judgment

The court entered judgment for Anthropic on its First Amendment retaliation, Fifth Amendment due-process and Administrative Procedure Act claims, holding that Hegseth’s designation exceeded his authority under 10 U.S.C. § 3252 and was arbitrary and capricious, and ordering declaratory relief, vacatur and an injunction. Lin was careful to note the limits of the ruling: the Department of War remained “undisputedly free to select the AI vendor of its choice,” and she rejected Anthropic’s separate separation-of-powers theory. But the broad blacklisting, she wrote, was “illegal and baseless” — “the empty invocation of national security is not a blank check to punish and retaliate against government critics.” Anthropic welcomed the decision; the government was expected to appeal.