Court overturns Pentagon's 'baseless' ban on AI firm Anthropic

A federal judge ruled that the Pentagon's designation of Anthropic as a supply chain risk was unlawful, citing the empty invocation of national security as a pretext for retaliation. The ruling blocks certain agencies from enforcing a presidential order to stop using Anthropic's tools, though the company still faces a separate designation. Anthropic welcomed the decision and reiterated its commitment to working with the government on AI for national security.

The ruling stems from a February confrontation when Pentagon leadership sought to have Anthropic weaken safety protocols on its Claude systems. Anthropic's refusal to accommodate requests involving mass surveillance and autonomous weapons development triggered the government's response, leading to a presidential directive mandating federal agencies phase out Anthropic products over six months.

Anthropic pursued legal action across two federal courts to contest separate supply chain designations. While this ruling addresses one designation, the company remains under the second designation pending another court's decision. The legal battle has not impeded Anthropic's commercial momentum, with quarterly revenue reaching $11.5 billion — a fourteenfold increase from the prior year — as the company prepares for a potentially record-breaking IPO.