A federal judge has sided with AI company Anthropic after President Donald Trump and Secretary of Defense Pete Hegseth banned federal agencies from using its services, calling it a supply chain risk.
In a 43-page ruling issued on Thursday, U.S. District Judge Rita Lin stated that referring to Anthropic as a supply chain risk was “likely both contrary to law and arbitrary and capricious.” She also blocked enforcement of Trump’s directive that all federal agencies stop using Anthropic and Claude.
Anthropic CEO Dario Amodei wrote a staff memo earlier this month noting the reason the Defense Department and Trump were feuding with his company was that “we haven’t given dictator-style praise to Trump," unlike its competitors.
Amodei later apologized for the “tone” of the memo, but pursued the lawsuit against the government over an “unlawful campaign of retaliation” after Anthropic refused to grant the U.S. military unfettered use of its AI tool, Claude.
Anthropic claimed the government had flouted due process when Hegseth deemed the tech company a supply chain risk on social media last month, a term usually applied to foreign adversaries, which would harm Anthropic financially.
On Feb. 27, Trump called Anthropic “Leftwing nut jobs” and said they were trying to “STRONG-ARM” the Pentagon and insisted that all federal agents “IMMEDIATELY CEASE” using their technology.
“We don’t need it, we don’t want it, and will not do business with them again!,” Trump, 79, wrote on Truth Social.
Judge Lin’s ruling held that the government had breached free speech protections through its statements.
The judge, an appointee of former President Joe Biden, said the “broad punitive measures” green-lit by Trump and the Pentagon could “cripple Anthropic” financially.
“Nothing in the governing statute supports the Orwellian notion that an American company may be branded a potential adversary and saboteur of the U.S. for expressing disagreement with the government,” Lin wrote.
“These broad measures do not appear to be directed at the government’s stated national security interests,” she wrote. “The Department of War’s records show that it designated Anthropic as a supply chain risk because of its ‘hostile manner through the press.’”
“Punishing Anthropic for bringing public scrutiny to the government’s contracting position is classic illegal First Amendment retaliation,” Lin added.
Anthropic asked Lin to issue an emergency order to counter the retaliation campaign that led the company to sue the Trump administration earlier this month.
The Pentagon insisted they should be able to use Claude any way they liked, while Anthropic aired concerns over preventing the government using the AI technology for mass surveillance of Americans or in fully autonomous weapons.
The judge said the issue was not about public policy debate, but rather the government’s actions in response to it.
“If the concern is the integrity of the operational chain of command, the Department of War could just stop using Claude. Instead, these measures appear designed to punish Anthropic,” Lin wrote.
She paused her order for a week to allow time for an appeal and said her order does not require the Pentagon to use Claude, and that they can still use other AI providers.
Anthropic’s separate case, which focuses on the company being declared a supply chain risk, is still pending before the federal appeals court.
In a statement, Anthropic said that it was “grateful to the court for moving swiftly, and pleased they agree Anthropic is likely to succeed on the merits.”
“While this case was necessary to protect Anthropic, our customers, and our partners, our focus remains on working productively with the government to ensure all Americans benefit from safe, reliable AI,” the company said.
Emil Michael, the Undersecretary of Defense for Research and Engineering, called out Lin’s judgment.
“There are dozens of factual errors in the 42 page judgment rushed out in 48 hours DURING A TIME OF CONFLICT,” Michael posted on X on Thursday.
He claimed the ruling “seeks to upend” Trump’s role as commander in chief and “disrupt” Hegseth’s ability “to conduct military operations with the partners it chooses. A disgrace.”
The Daily Beast has contacted Anthropic and the Pentagon for comment.
