Judge Rules Trump Administration Illegally Punished AI Firm Anthropic
A federal judge has ruled that the Trump administration unlawfully penalized the artificial intelligence company Anthropic for refusing to allow the military to use its Claude large language model for purposes such as mass surveillance of Americans and lethal autonomous warfare.
The dispute originated when the Pentagon demanded Anthropic remove all usage restrictions and agree to a clause permitting “all lawful uses.” Anthropic acceded to most demands but maintained two core limitations. On February 27, then-President Trump ordered all federal agencies to cease using Anthropic’s technology, labeling the company a “RADICAL LEFT, WOKE COMPANY” on his social media platform, Truth Social. Former Pentagon official Anthony Hegseth subsequently accused Anthropic in a tweet of exhibiting “a master class in arrogance and betrayal” and barred any military contractor from engaging with the company.
The government has since withdrawn its primary argument. Its initial risk assessment was predicated on the belief that Anthropic possessed backdoor access to deployed models. However, the government now concedes that Anthropic has no such access and that Claude poses no greater risk than any other “black box” system. This left only one remaining factor: trust, which a Pentagon memo stated was eroded by Anthropic’s “increasingly hostile manner through the press.”
U.S. District Judge Jessica May Lin found the timeline of events undermined the government’s position. Days before Anthropic was blacklisted, Hegseth had suggested invoking the Defense Production Act, a move that would have positioned Anthropic as essential to national security. The day after the designation, an under secretary emailed Anthropic indicating a contract was “very close.” Lin also noted that the government is still in discussions with Anthropic regarding collaboration on Mythos, the company’s latest model, for use in sensitive contexts.
“The empty invocation of national security is not a blank check to punish and retaliate against government critics,” Lin wrote, concluding that the administration’s actions were retaliatory under the First Amendment, imposed without the due process required by the Fifth Amendment, outside the scope of the relevant supply chain statute, and were arbitrary and capricious.
Anthropic did not achieve a complete victory. Lin rejected its argument that Trump’s directive exceeded presidential authority and entered judgment for agencies that took no action.
She vacated the designation and Hegseth’s boycott order, issued a permanent injunction, and denied the government’s request for a seven-day administrative stay. Lin pointed out that the government had been operating under a preliminary injunction since March without demonstrating any harm.
Anthropic had informed the court that if these measures remained in place, its defense-related revenue would decrease by 50% to 100%, and its overall revenue for 2026 would be reduced by billions of dollars.
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