Anthropic ​argued designation as ‘supply chain risk’ could cost the company billions ‌of dollars in lost business ‌and reputational harm

A US federal judge ruled Thursday that sanctions imposed in February by the Trump administration against AI giant Anthropic were illegal, finding that the government had punished the artificial intelligence company for publicly criticising the Pentagon.

“The empty invocation of national security is not a blank check to punish and retaliate against government critics,” Judge Rita Lin said in a 59-page decision.

She barred the federal agencies named in the lawsuit from enforcing President Donald Trump’s order to stop using the tools of Anthropic – creator of the Claude AI models – and overturned defense secretary Pete Hegseth’s designation of the company as a “supply chain risk”, a status previously reserved for foreign firms.

The ruling makes permanent the temporary suspension of sanctions ordered by the judge in March and takes effect immediately. The government may appeal.

“We welcome the court’s ruling that this supply chain risk designation was unlawful,” an Anthropic spokesperson said.

Hegseth’s unprecedented move, which followed Anthropic’s refusal to allow the military to ⁠use AI chatbot Claude for US surveillance or autonomous weapons, blocked Anthropic from certain military contracts. Anthropic executives ​have said it could cost the company billions ‌of dollars in lost business ‌and reputational harm.

Trump had lashed out at the company after its refusal, describing it in a February social media post as “a radical left, woke company” and “out-of-control”.

Anthropic says that AI models are not reliable enough to be safely used in autonomous weapons ‌and that it opposes domestic surveillance as a violation of rights, but the Pentagon says private companies should not be able to constrain military action.

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