Federal judge blocks Trump administration's Anthropic supply-chain risk label

U.S. District Judge Rita Lin ruled on Thursday that the Trump administration’s decision to label Anthropic as a “supply-chain risk” was illegal. In her opinion, Lin described the move by Defense Secretary Pete Hegseth as “illegal retaliation” that violates the First Amendment and called it “arbitrary and capricious.” She also found that the company was denied the due-process rights required by the Fifth Amendment.

Earlier this year, Pete Hegseth and President Donald Trump signed an order designating the maker of Claude, Anthropic, as a security risk and directing all federal agencies, including non-security ones, to halt any work with the firm. The official justification cited supply-chain concerns, but the underlying dispute centered on Anthropic’s refusal to remove safety guardrails that would have allowed the Defense Department to employ the models for fully autonomous weapons and mass surveillance of American citizens. The Defense Department denied any such intent and argued that Anthropic might attempt to control military use of models already purchased and paid for.

Lin highlighted an unexplained gap between the “risk” label and other government actions. Pete Hegseth himself proposed applying the Defense Production Act to Anthropic, a step that would have classified the company as essential to national security rather than a threat. Simultaneously, the Defense Department continued to advance a contract with Anthropic, and federal agencies were collaborating with it on the new cyber model Mythos. The judge also concluded that evidence shows Anthropic “does not have an unambiguous backdoor approach to the technology after it is transferred to the Defense Department.”

“Even though the Department of Defense is entitled to choose its artificial-intelligence supplier, the evidence shows that the sweeping steps taken against Anthropic were illegal and unfounded,” Lin wrote. “The empty reference to national security is not a blank check to punish and retaliate against government watchdogs.”

Anthropic’s spokesperson said, “The company welcomes the ruling and continues to focus on productive work with the government for national security that will benefit all Americans.” A parallel lawsuit filed by the company in Washington, D.C. remains pending.