A United States judge has blocked the Pentagon's blacklisting of artificial intelligence company Anthropic, ruling Thursday night that the Department of Defense acted illegally. District Judge Rita Lin issued a 59-page order stating the department had wrongly designated the AI firm a supply chain risk to national security.

The decision represents a significant victory for Anthropic, known for its Claude AI models, in its contentious dispute with the U.S. military over the development and deployment of artificial intelligence. The Pentagon is widely expected to challenge the ruling.

Judge Lin's order specifically criticized the Pentagon, asserting that the department had targeted and punished Anthropic due to the company's public critiques of the Defense Department's approach to AI integration on the battlefield. "The empty invocation of national security is not a blank check to punish and retaliate against government critics," Lin wrote in her decision.

The lawsuit, filed in a California federal court, alleged that Defense Secretary Pete Hegseth exceeded his authority by labeling Anthropic a national security supply-chain risk. This designation prevented Anthropic from securing military contracts and followed the company's refusal to allow the military to utilize its Claude AI models for U.S. surveillance or autonomous weapons systems.

Anthropic has consistently argued that current AI models are not sufficiently reliable for autonomous weapons and has expressed opposition to domestic surveillance applications. In contrast, the Pentagon maintains that private companies should not impose limitations on military operations. Executives at Anthropic have previously stated that the ban could result in billions of dollars in lost business.

During a hearing on July 30, Judge Lin expressed concerns about the government's position, describing it as "really troubling" and "at odds … with the First Amendment." She noted that the evidence presented had "gotten worse for the government" as the case progressed.

This case marked the first instance of a U.S. company being publicly identified as a supply-chain risk under a little-known procurement statute designed to shield military systems from foreign interference. Anthropic contended in its lawsuit that the government violated its constitutional rights to free speech and due process by retaliating against its safety-focused views without providing an opportunity to contest the accusation.

In response to the ruling, Anthropic stated that it remains "focused on working productively with the government to harness AI for our national security so all Americans benefit from this technology."