Judge voids Pentagon's blacklisting of AI firm, citing retaliation

A US federal judge has declared the Pentagon's sanctions against AI company Anthropic unlawful, stating that the government retaliated against the firm for its public criticism. The ruling permanently blocks the enforcement of the order and reverses the 'supply chain risk' designation. Anthropic had argued the designation could cause billions in lost business and reputational damage.

The ruling marks the first successful legal challenge to a supply-chain risk designation under the procurement statute, which had previously been applied only to foreign companies. Anthropic's refusal to allow military use of Claude for surveillance or autonomous weapons triggered the February sanctions, with Trump publicly attacking the company on social media as "radical left" and "out-of-control."

Judge Lin, a Biden appointee, found the Pentagon's action violated Anthropic's first amendment rights and denied due process under the fifth amendment. The government had argued the designation stemmed from contractual disagreements rather than political views. A separate lawsuit in Washington DC challenges a second designation that could exclude Anthropic from civilian government contracts.