In a landmark ruling issued Thursday, a US federal judge has struck down as illegal punitive measures imposed earlier this year by the Trump administration against leading artificial intelligence developer Anthropic, finding the government targeted the company in retaliation for its public criticism of Pentagon policy.
The legal dispute traces back to Anthropic’s high-profile refusal to grant the US military access to its flagship Claude AI model for two controversial use cases: powering fully autonomous lethal weapons, and conducting mass surveillance of American civilians. The decision drew fierce public pushback from former President Donald Trump, who labeled the AI firm a “radical left, woke company” and “out-of-control” in a February social media post. Shortly after, the administration enacted sweeping sanctions, including an order barring all federal agencies from using Anthropic’s tools, and a designation by Defense Secretary Pete Hegseth that labeled the company a national “supply chain risk” — a classification that prior to this case had only been applied to foreign firms.
In her 59-page ruling, Judge Rita Lin rejected the administration’s justification for the penalties. “The empty invocation of national security is not a blank check to punish and retaliate against government critics,” Lin wrote in the decision reviewed by Agence France-Presse. The judge permanently blocked the named federal agencies from enforcing Trump’s executive order, and formally overturned Hegseth’s supply chain risk designation, cementing a temporary suspension of the sanctions that she first ordered in March. The ruling goes into effect immediately, though administration officials have indicated they may still appeal the decision.
Anthropic welcomed the court’s outcome in a statement Thursday. “We welcome the court’s ruling that this supply chain risk designation was unlawful,” a company spokesperson said. “We remain focused on working productively with the government to harness AI for our national security so all Americans benefit from this technology.”
Court documents and prior reporting confirm the US military had already integrated Claude into a wide range of classified and sensitive government systems before the sanctions were imposed. Multiple outlets including the Wall Street Journal and Axios have reported that the AI tool was even used during the January special operations mission that captured former Venezuelan leader Nicolas Maduro. The supply chain risk designation, formally finalized in March, immediately canceled all of Anthropic’s existing military contracts and barred other Pentagon contractors from integrating the company’s AI technology into their work.
Despite the major legal victory, Anthropic’s fight against administration penalties is not yet complete. A second separate sanction imposed by the Pentagon the same day, rooted in public procurement regulations, remains in place as a separate legal challenge proceeds in a Washington DC court, where a judge declined to suspend the measure back in April.
Tensions between the Trump White House and Anthropic extend beyond the military access dispute, with the administration repeatedly pushing back against CEO Dario Amodei’s consistent public warnings about the existential and societal risks of unregulated advanced AI, including its potential to displace large numbers of American workers. Looking ahead, the AI firm is widely expected to launch its initial public offering on Wall Street in the coming weeks. Industry analysts project the listing could surpass the record-breaking debut of SpaceX back in June, which raised $86.2 billion and set a new benchmark for private-to-public market valuation in the tech sector.