Judge Rules Against Pentagon's Designation of Anthropic as Supply Chain Risk

A judge has ruled that the US Department of Defense acted unlawfully when it designated artificial intelligence (AI) startup Anthropic as a supply chain risk, describing the decision as "illegal and baseless." The ruling came after Anthropic filed a lawsuit arguing that Defense Secretary Pete Hegseth exceeded his authority with the designation, which followed the company's refusal to permit the military to use its AI models for purposes such as surveillance or autonomous weapons. US District Judge Rita Lin stated that citing national security does not grant the government a "blank check to punish and retaliate against government critics." Anthropic welcomed the ruling, emphasizing its intention to work productively with the government to leverage AI for national security benefits. The judge noted that the Defense Department unlawfully ordered firms doing business with the US military to boycott Anthropic. The Pentagon had designated Anthropic as a supply chain risk in February, a classification typically reserved for companies from nations considered threats to the US, marking the first instance of an American company receiving such a designation. Anthropic's lawsuit claimed that the government's actions were unprecedented and unlawful, asserting that its models were not reliable enough for military weapon systems and opposing their use for domestic surveillance as a rights violation. The Pentagon contended that private companies should not limit military operations and expressed concerns about Anthropic's refusal to accept new contract terms. The White House previously characterized Anthropic as "a radical left, woke company" attempting to control military activity, asserting that the military is accountable to the US Constitution rather than the terms of service of any AI company. Judge Lin indicated that the government's actions seemed to aim at crippling the company and chilling public debate regarding military AI use, stating, "This appears to be classic First Amendment retaliation."