US judge rules Pentagon acted unlawfully in Anthropic retaliation case

A US federal judge has ruled that the Department of Defense acted unlawfully when it designated artificial intelligence company Anthropic as a supply-chain risk. The court described the move as illegal and baseless, in a decision that sharpens a dispute over how far the military can go in pressing private AI firms to support defence work. The case centres on Anthropic's refusal to allow its models to be used for surveillance or autonomous weapons.

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US district judge Rita Lin said the government could not use national security as a blanket justification to punish or retaliate against critics. Anthropic had argued that Defence Secretary Pete Hegseth exceeded his authority when the designation was imposed. The company also said the government's actions were unprecedented and unlawful, and that they harmed its business and violated its right to free speech.

The designation was made under a law intended to protect military systems from foreign sabotage, and the company said it was the first time an American company had been publicly labelled in that way. Anthropic said its models were not reliable enough to be used safely in weapons systems, and that it opposed domestic surveillance uses on rights grounds. The Pentagon had previously said private companies should not be able to constrain military action, while the White House accused Anthropic of trying to control military activity.

The ruling matters because it touches on a wider struggle over the role of AI in national security. Governments are increasingly seeking access to advanced AI tools, while companies are trying to set limits on how their systems are used. The case also raises questions about whether procurement and security designations can be used to pressure firms that resist military applications of their technology.

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Judge Lin had earlier said the government appeared to be trying to cripple the company and chill public debate over military use of AI. In the latest ruling, she said the conduct amounted to classic First Amendment retaliation. Anthropic said it welcomed the decision and said it wanted to work productively with the government so Americans could benefit from AI in national security.

The Pentagon and the White House have been contacted for comment, but no response was included in the material provided. It is not yet clear whether the government will appeal or whether the ruling will change how the military engages with AI companies. The next developments are likely to focus on the legal response and any wider impact on defence procurement and AI policy.

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