Judge Rita Lin ruled that the Pentagon's designation of Anthropic as a supply chain risk was unlawful, finding it violated the First Amendment. CNBC reports the court found that the Department of Defense violated the First Amendment by designating Anthropic a supply chain risk "based on a desire to make a public example"1 out of the company.
The dispute followed public friction between the administration and Anthropic over the company's AI model Claude and its use restrictions, including around autonomous weapons and surveillance. BBC News reports that the White House had previously said Anthropic was "a radical left, woke company"2 attempting to control military activity" and argued the military was beholden to the US Constitution, "2not any woke AI company's terms of service".
The Washington Times reports that the Defense Department had entered a partnership involving Anthropic's Claude beginning in late 2024 through a Palantir arrangement, and that the department signed a formal $200 million contract with Anthropic in July 2025. The Washington Times also describes the ban, calling the prohibition more a fit of rage than a well-founded policy.
Al Jazeera English reports that the designation was the first time a US company has been publicly labelled a supply-chain risk under an obscure procurement statute aimed at protecting military systems from foreign sabotage. Al Jazeera English also reports that executives have said the ban could cost the company billions of dollars in lost business.
Anthropic won most of its claims but lost on one. Decrypt reports that Anthropic lost on one count, its claim that Trump's directive to federal agencies exceeded presidential power. Decrypt also reports that the government conceded Anthropic has no backdoor access to deployed models and is no riskier than any other AI system.
