A federal judge ruled Thursday that the Trump administration's decision to label AI company Anthropic a 'supply chain risk' was illegal, in a sweeping decision that blocked one of the administration's most dramatic moves against the AI sector.
The Pentagon had designated Anthropic — the maker of the Claude family of AI models — as a supply chain risk earlier this year, a classification that restricted the company's ability to do business with the U.S. government and signaled broader security concerns. Anthropic sued the Defense Department in March, calling the designation an 'unlawful campaign of retaliation' tied to the company's vocal criticism of certain AI policies.
The judge found that the Pentagon's action lacked sufficient legal basis and violated the procedures required for such designations. The ruling ordered the designation vacated.
The decision is a significant legal victory for Anthropic, one of the world's most valuable AI companies, and sets a precedent for how the government can use supply chain risk authorities against technology firms. It also raises questions about the intersection of national security policy and AI industry regulation under the current administration.
Anthropic had argued that the designation threatened to chill AI research and development by subjecting companies to government retaliation based on their policy positions rather than actual security concerns. The company's legal team presented evidence that the designation followed Anthropic's public statements on AI safety and governance.
The ruling comes at a time of heightened tension between AI companies and the federal government over issues ranging from content moderation to national security applications of AI technology.
The government is expected to appeal the decision.
