Judge Blocks Pentagon From Branding Anthropic a National Security Threat

A federal judge has blocked the Pentagon from labeling Anthropic as a supply chain risk, ruling Thursday that the government’s campaign against the AI ​​company violated the First Amendment and due process rights.

U.S. District Judge Rita Lin handed down the sentence preliminary injunction from the Northern District of California, two days after hearing oral arguments from both sides, in a case that observers said had been made inevitable by the government’s own paperwork.

“Nothing in the government statute supports the Orwellian idea that a U.S. company can be branded as a potential adversary and saboteur of the U.S. because it disagrees with the government,” Judge Lin wrote.

The internal file was fatal to the government’s case, said Andrew Rossow, public affairs attorney and CEO of AR Media Consulting, who told Declutter that the designation “was caused by press behavior, and not by a security analysis.”

“The government essentially wrote its own motive, and it was retaliation,” Rossow said.

The dispute centers on a two-year, $200 million contract awarded to Anthropic in July 2025 by the Department of War’s Chief Digital and Artificial Intelligence Office.

Negotiations to deploy Claude on the department’s GenAI.Mil platform collapsed after the two sides failed to agree on usage restrictions.

Anthropic insisted on two conditions: that Claude would not be used for mass surveillance of Americans or for lethal use in autonomous warfare, arguing that the model was not yet safe for either purpose.

At a meeting on February 24, Secretary of War Pete Hegseth told Anthropic representatives that if the company did not drop its restrictions by February 27, the department would immediately designate it as a supply chain risk.

Anthropic refused to comply.

On the same day, President Trump posted a guideline on Truth Social is ordering every federal agency to “immediately stop” using the company’s technology, calling Anthropic a “radical left, woke company.”

Just over an hour later, Hegseth described Anthropic’s position as a “master class in arrogance and betrayal,” ordering that no contractor doing business with the military be allowed to engage in commercial activities with the company. The formal supply chain designation followed by a letter on March 3.

Anthropic sued the government on March 9, for violations of the First Amendment, due process and the Administrative Procedure Act.

“Punishing Anthropic for publicly investigating the government’s contractual position is classic illegal First Amendment retaliation,” Judge Lin wrote in Thursday’s order.

The order, which was suspended for seven days, blocks all three government actions, requires a compliance report by April 6 and restores the status quo before the events of February 27.

Weaponizing the law

The label “supply chain risk” has historically been reserved for foreign intelligence services, terrorists, and other hostile actors.

Before Anthropic, it had never been applied to a domestic company. Defense contractors began assessing and, in many cases, ending their dependence on Anthropic in the weeks that followed, Judge Lin’s order said.

And the government’s stance could have unforeseen consequences, experts say.

Thursday’s ruling could push AI companies to “formalize ethical guardrails when working with governments,” Pichapen Prateepavanich, policy strategist and founder of infrastructure firm Gather Beyond, told me. Declutter.

To some extent, the ruling also suggests that companies can “set clear usage limits without automatically triggering punitive measures,” she said.

But this “doesn’t take away the tension,” she added. What the prevailing limits are is “the ability to escalate that disagreement into broader exclusion or labeling that seems like retaliation.”

Yet the application of the current legal power to designate a company as a supply chain risk “because it refused to remove the safety rails” is not an extension of the statute for supply chain risksRossow explained. Instead, it functions as a ‘weaponization’ of the law.

“This is part of an ongoing pattern of behavior by the White House when challenged, resulting in disproportionate, emotionally driven and biased threats and government extortion,” he added.

If the government’s “theory” is accepted, it would set a “dangerous” precedent in which AI companies could be blacklisted over security policies the government dislikes, “before harm occurs,” without due process, under the banner of national security, Rossow said.