A US federal judge has declared the Pentagon’s classification of Anthropic as a security risk to national security unlawful. Judge Rita Lin ruled in a 59-page decision that the Department of Defense violated the company’s freedom of speech. A second proceeding to exclude Anthropic from Pentagon contracts is ongoing.
Dispute ignites over rules for combat operations
The conflict dates back to early 2026: after the Pentagon, under Defense Secretary Pete Hegseth, had already threatened the measure in February, it officially classified Anthropic in early March as a “supply chain risk” to national security – a category that had previously only been imposed on foreign companies with alleged connections to Chinese or Russian actors. Anthropic thus became the first US company to receive this label from the department. The trigger was Anthropic’s refusal to release its language model Claude for fully autonomous lethal weapon systems or for mass surveillance of US citizens – a restriction that has been part of the company’s public usage policies for years. Shortly after the classification, the Trump administration ordered federal agencies to phase out Claude and other Anthropic services within six months. Anthropic filed a lawsuit on March 9, calling it an unlawful retaliation campaign. As Al Jazeera reports, the legal dispute followed months of public exchanges between the company and the department. The case is part of a broader power struggle between major AI providers and the US government over control of military AI usage – a dispute in which Anthropic recently surpassed Nvidia in lobbying spending to secure political influence in Washington.
Court accuses department of unconstitutional retaliation
In her decision at the federal court in San Francisco, Judge Lin reaches a clear conclusion: the risk classification violated the First Amendment because it was intended to punish criticism of the Department of Defense, and Anthropic was also denied the hearing required under the Fifth Amendment before the measure took effect. The decision by Secretary Hegseth also violates applicable administrative law and was made without a viable factual basis, making it arbitrary. The reasoning of the judgment states, in essence, that mere reference to national security is not a blank check to punish and retaliate against government critics. A Pentagon spokesperson initially did not comment on the ruling. Observers expect an appeal by the government before the relevant appellate court, though no official timeline has been set. Already in March, Lin had temporarily ruled in favor of Anthropic through a preliminary injunction, labeling the retaliatory intent a “classic” violation of freedom of speech. The current decision now confirms that assessment on the merits.
Contract ban remains in place despite the win
The legal success only partially resolves the situation for Anthropic: the exclusion of the company from Pentagon procurement contracts is the subject of a separate proceeding before a court in Washington, which had already denied an emergency application from Anthropic in April. Even a win in both proceedings would not automatically obligate the department to resume working with the company, as NBC News reports. An Anthropic spokesperson said the company welcomes the ruling and wants to keep working productively with the government so that all Americans benefit from the technology. Anthropic executives put the potential revenue losses from the continued exclusion at a billion-dollar figure – independently unverified. More is at stake for the company than a single contract: just days earlier, investors in a new funding round floated a valuation of two trillion dollars, with prospects for government business factoring into that figure.
What matters now is how the still-open Washington proceeding over the actual contract ban turns out, and whether the government appeals the current ruling. Until then, Anthropic remains locked out of one of the US government’s largest AI customers, while the broader fight over military guardrails for AI models between Washington and Silicon Valley keeps intensifying.
