Anthropic wins court ruling that calls Pentagon blacklist illegal

A federal judge has ruled that the Pentagon’s decision to blacklist Anthropic as a supply chain risk was “illegal and baseless.” U.S. District Judge Rita Lin ruled late on Thursday in San Francisco, CNBC reported, in a decision that runs to 59 pages. It’s the first court win in a fight that began when Anthropic refused to let Claude be used for mass domestic surveillance or fully autonomous weapons.

Lin found that the Department of Defense violated the First Amendment. The government’s actions “were based on a desire to make a public example out of Anthropic for its ‘arrogance’ in criticizing the government, not based on any articulable basis to believe that Anthropic would actually sabotage its model,” she wrote, according to NPR. The order also called the designation arbitrary and capricious, and found that Anthropic was denied the process the Fifth Amendment requires before the government takes something away, TechCrunch reported.

Neither the Constitution nor the federal statute invoked by Defendants allows them to impose sweeping penalties based principally on Anthropic’s critique of the Administration’s views.

Judge Rita Lin, U.S. District Court for the Northern District of California, via CNBC

The dispute broke into the open on February 27, when Defense Secretary Pete Hegseth said on X that he was directing the department to designate Anthropic a supply chain risk. Anthropic said in a statement that day that months of negotiation had reached an impasse over two exceptions to otherwise lawful use of Claude. It called the move “an unprecedented action” that was “historically reserved for US adversaries, never before publicly applied to an American company.” President Trump also ordered federal agencies to stop using Anthropic’s tools, with a six-month phase-out, Engadget reported.

The letter confirming the designation arrived on March 4, under a statute known as 10 USC 3252. Anthropic CEO Dario Amodei wrote the next day that the law “exists to protect the government rather than to punish a supplier,” and the company sued. Because the Pentagon relied on two distinct designations, the cases had to be litigated in two separate courts, per CNBC. That’s why Thursday’s ruling settles only half the fight.

Date	What happened	Source
Feb 27, 2026	Hegseth says on X he’s directing a supply chain risk designation; Trump orders agencies to phase out Anthropic	Anthropic, Engadget
Mar 4, 2026	Anthropic receives the Department of War letter confirming the designation	Anthropic
March 2026	Anthropic sues in San Francisco and in Washington, D.C.	CNBC
Jul 30, 2026	Hearing: Lin calls the government’s position “really troubling”	NPR
Aug 27, 2026	59-page order finds the designation illegal and baseless	CNBC, Engadget
Pending	Narrower case on the second designation, in the D.C. federal appeals court	NPR, SiliconANGLE

The national security argument didn’t survive contact with the record. The Pentagon had claimed Anthropic could have “backdoor access to its technology once deployed in a national security system,” but officials conceded during the case that no such access exists, SiliconANGLE reported. Lin wrote that Anthropic’s technology is “no riskier to the national security than any other ‘black box’ artificial intelligence model.” What remained was the department’s complaint about Anthropic’s “increasingly hostile manner through the press,” which is a complaint about speech.

Other parts of the record cut the same way. TechCrunch reported that the department was pursuing an Anthropic contract and weighing Defense Production Act proposals while it called the company a threat. At the July 30 hearing, Justice Department lawyers argued that AI models are “so staggeringly enormous and opaque” that the Pentagon can’t evaluate them like a piece of hardware. Lin said at that hearing that the record had “gotten worse for the government” over time, per NPR.

The empty invocation of national security is not a blank check to punish and retaliate against government critics.

Judge Rita Lin, via Engadget

Even so, the ruling has limits. Anthropic technically remains a supply chain risk until the D.C. case is resolved, CNBC reported. Winning both cases wouldn’t force the Pentagon to restart work with the company, because the suits only ask to restore the status quo before the designation. The government is expected to fight the ruling, and the White House didn’t immediately respond to NPR’s request for comment.

“We welcome the court’s ruling that this supply chain risk designation was unlawful,” an Anthropic spokesperson told CNBC. “We remain focused on working productively with the government to harness AI for our national security so all Americans benefit from this technology.”

The blacklist hasn’t shown up in the numbers. Anthropic’s revenue reached $11.5 billion in the second quarter, 14 times the same quarter a year earlier, and its run rate hit $65 billion in July. The company is heading toward what’s expected to be a near-record IPO. The catch is the business that was cut off: CNBC notes that restored Pentagon ties could reopen opportunities the designation closed.

Anthropic has said it has supported American warfighters since June 2024 and that it offered to keep supplying models at nominal cost during any transition. The next test is the D.C. appeals court, which still has to rule on the second designation before the label comes off. After that comes the appeal the government is expected to file against Thursday’s order.