A federal judge in San Francisco ruled that the Pentagon’s decision to designate Anthropic as a supply chain security risk violated the law, stating that it crossed a constitutional line by using the designation as payback for the company’s public criticism.

U.S. District Judge Rita Lin stated that national security decisions warrant judicial deference, but argued that the government had not offered a sufficient rationale to support its actions, CNBC reported.

Lin’s order said the department’s filings pointed to Anthropic’s posture in media coverage and its pushback on how the military wanted to deploy AI, but that those factors could not justify broad penalties. 

"Defendants claim that because of Anthropic’s ‘increasingly hostile manner through the press’ and its criticism of the Department of War’s [Defense’s] views on AI use, Defendants cannot trust Anthropic to ensure the integrity of its models. Neither the Constitution nor the federal statute invoked by Defendants allows them to impose sweeping penalties based principally on Anthropic’s critique of the Administration’s views," Lin wrote in the order. 

The dispute traces back to February, when the U.S. Department of Defense applied the "supply chain risk" tag after negotiations over access to Anthropic’s Claude models fell apart, according to CNBC. The report said Anthropic sought commitments that its systems would not be used for full autonomous weapons or mass domestic surveillance, while the department pressed for broad access for any lawful use.

Anthropic challenged the action in two courts, with one case in San Francisco and another in Washington, D.C., because the Pentagon relied on two separate legal tracks to support the designation. 

Lin’s ruling addressed the California matter, but the D.C. litigation continues, leaving the company technically under the supply chain risk label until that case is resolved.

"We welcome the court’s ruling that this supply chain risk designation was unlawful. We remain focused on working productively with the government to harness AI for our national security so all Americans benefit from this technology,” a spokesperson for Anthropic wrote in a statement to Benzinga.

Benzinga contacted the Pentagon for comment. The department acknowledged receipt of the request but did not respond before publication.

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