Anthropic was illegally blacklisted by the Trump administration, court rules

On Thursday, a judge ruled that the Pentagon’s blacklisting of Anthropic earlier this year was unconstitutional, delivering the AI lab a win in a monthslong rollercoaster of a battle with the Trump administration.

The lawsuit, filed in March in a California district court, accused the Trump administration of unlawfully retaliating against Anthropic for setting “red lines,” or unacceptable military use cases of its AI technology.

“The empty invocation of national security is not a blank check to punish and retaliate against government critics,” Judge Rita F. Lin, a district judge in the northern district of California, wrote in the ruling.

She also wrote that the actions were “unlawful retaliation in violation of the First Amendment,” adding that Defense Secretary Pete Hegseth’s decision to designate Anthropic a supply chain risk “was arbitrary and capricious. Though the Department of War is undisputedly free to select the AI vendor of its choice, the evidence demonstrates that the broad measures imposed on Anthropic were illegal and baseless.”

It all started this past winter, when Hegseth decided to renegotiate all AI labs’ current contracts with the military to allow the Pentagon to use AI for “any lawful use,” which would expand the Pentagon’s authority significantly. Most AI labs ended up signing onto the new terms, but Anthropic stood firm on setting two restrictions: not allowing for its AI to be used for mass surveillance of Americans or for lethal autonomous weapons (i.e., AI systems with the power to kill targets without human oversight). Anthropic’s refusal to cooperate kicked off a high-stakes back-and-forth of intensifying pressure on both sides, followed by a bevy of insults from Department of Defense officials and a final ultimatum from the Trump administration.

Less than 24 hours before that ultimatum, Anthropic CEO Dario Amodei issued a statement that the company wouldn’t change its stance, writing that the company has “never raised objections to particular military operations nor attempted to limit use of our technology in an ad hoc manner” but that in a “narrow set of cases, we believe AI can undermine, rather than defend, democratic values.” After that, Anthropic was named a “supply chain risk,” a classification that is usually reserved for national security threats, and the Pentagon moved to replace its influence in the Department of Defense by signing deals with seven other AI labs, including Google, Microsoft, OpenAI, and SpaceX.

Anthropic fought back with the lawsuit, and in March, Judge Lin sided with the company, temporarily blocking the Pentagon’s blacklist. “The Department of War’s records show that it designated Anthropic as a supply chain risk because of its ‘hostile manner through the press,’” she wrote in the order at the time. “Punishing Anthropic for bringing public scrutiny to the government’s contracting position is classic illegal First Amendment retaliation.”

In a statement on Thursday, Anthropic spokesperson Danielle Ghiglieri said, “We welcome the court’s ruling that this supply chain risk designation was unlawful. We remain focused on working productively with the government to harness AI for our national security so all Americans benefit from this technology.”

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