Judge rules Trump administration acted illegally against AI firm Anthropic

A judge late Thursday permanently barred the Trump administration from enforcing a set of rules aimed at cutting off Anthropic from the federal government, ruling the administration had unconstitutionally punished the artificial intelligence company for protected speech.

The ruling marks a victory for Anthropic in its monthslong legal battle against the administration over its push to impose guardrails on its powerful AI model Claude, which is used by the military. Anthropic sought to prevent Claude from being used for mass surveillance or fully autonomous weapons, but the military argued it should be allowed to use the model for all lawful purposes. 

With the two sides unable to reach a deal, President Trump ordered federal agencies to stop using Claude earlier this year, and Defense Secretary Pete Hegseth declared the firm a supply chain risk, aiming to prevent private defense contractors from using it to do work for the military. The administration argued those moves were necessary to safeguard national security.

In her ruling Thursday, U.S. District Judge Rita Lin of San Francisco declared that those actions violated the First Amendment by punishing it for disagreeing with the government, calling them “unlawful retaliation against Anthropic for constitutionally protected expressive activities.” She also said the moves against Anthropic violated the company’s due process rights.

Lin said her order does not require the government to use Anthropic or stop it from giving another AI firm its business, “so long as those actions are consistent with applicable regulations, statutes, and constitutional provisions.”

“The government is certainly owed deference on weighty issues of national security,” Lin wrote in a 59-page opinion. “But Defendants’ contemporaneous words and deeds confirm that the challenged actions were based on a desire to make a public example out of Anthropic for its ‘arrogance’ in criticizing the government, not based on any articulable basis to believe that Anthropic would actually sabotage its model.”

Lin continued: “The empty invocation of national security is not a blank check to punish and retaliate against government critics.”

An Anthropic spokesperson told WTX US News: “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.”

WTX US News has reached out to the Pentagon and the White House for comment.

In her ruling, Lin wrote that Anthropic does not meet the legal definition of a “supply chain risk,” a designation typically used to prevent a foreign adversary from sabotaging a crucial U.S. system.

The government has argued in the past that Anthropic’s tough negotiating stance and push for AI restrictions caused federal officials to fear the company could engage in “future sabotage” by installing a “kill switch” in its software. 

But Lin called this concern “entirely unfounded,” pointing to evidence offered by Anthropic that it doesn’t have the ability to maintain “backdoor” access to its systems. She also argued the fears of sabotage are tough to square with the government’s continued interest in collaborating with Anthropic on advanced AI models.

“An IT vendor does not become a potential adversary of the United States whenever it asks probing questions or stubbornly insists on particular contracting terms, even if doing so causes DoW to doubt its trustworthiness,” Lin said in her ruling Thursday.

Lin also invalidated a February social media post by Hegseth stating that no military contractors are allowed to conduct “any commercial activity with Anthropic,” saying it led to a broader “boycott” of the AI firm — even among military contractors that were using Anthropic for non-military-related work. Lawyers for the government had conceded that designating Anthropic as a supply chain risk didn’t prevent companies from using the AI technology for other purposes.

And Lin reversed several other federal agencies’ efforts to cut off Anthropic, which followed a Truth Social post by Mr. Trump ordering the government to “IMMEDIATELY CEASE all use of Anthropic’s technology.” She said those moves weren’t authorized by law, and the president’s directive was a “retaliatory act, taken without due process, meant to punish Anthropic for its protected speech.”

The judge wrote that “the decision to publicly broadcast Anthropic’s punishment via social media—even before the formal, administrative process of making the necessary findings to designate Anthropic a supply chain risk had begun— makes little sense except as an attempt to swiftly make a public example of Anthropic for daring to criticize the Administration.”

The dispute between Anthropic and the military highlights a broader debate over how governments and private companies should balance the potential benefits and perils of artificial intelligence.

Anthropic and its CEO, Dario Amodei, have long been vocal in their support for regulations and guardrails to manage the dangers of unconstrained AI technology. The Trump administration has called for some voluntary federal oversight of powerful AI models, but argues that overly stringent regulations could stifle innovation and make the U.S. less competitive against China, and has accused some AI models of being politically biased or “woke.”

The disagreement burst into public view earlier this year, as the two sides feuded over AI restrictions. Amodei told WTX US News in February he has a “patriotic” desire to work with the military, but he has two absolute “red lines”: using Claude to conduct mass surveillance of Americans, and using it to power autonomous weapons that can target people without human input. He argued Claude isn’t accurate enough for autonomous weapons, and mass surveillance could clash with American values.

The military argued that federal laws and internal policies already prevent domestic mass surveillance or fully autonomous weapons, so there is no need to restrict those practices in the Pentagon’s contracts. 

After negotiations between the two sides broke down in February, the Trump administration lashed out at Anthropic, accusing it of seeking to impose its own ideology on the military. Hegseth called Anthropic “sanctimonious,” and Mr. Trump called it a “radical left, woke company.”

After the Trump administration took action against Anthropic, the company sued in San Francisco federal court, accusing the government of violating the First Amendment by punishing it for protected speech. It also challenged the government’s actions in the U.S. Court of Appeals for the D.C. Circuit, a case that is still pending.

Anthropic drew support from civil liberties groups and from other tech industry players, including Microsoft, which wrote in an amicus brief that designating Anthropic a supply chain risk “may bring severe economic effects that are not in the public interest.”

The government pushed back, arguing it cut off Anthropic not because it criticized the Trump administration, but because the Defense Department — which the administration has sought to rename the Department of War — no longer trusted the company. It also argued Mr. Trump has the power to decide not to buy Anthropic’s services, and called the decisions by federal agencies to stop using Claude “internal IT housekeeping.”

“The government did not retaliate against Anthropic for any protected speech,” Justice Department lawyers wrote in June. “Instead, DoW assessed a substantial risk that Anthropic might manipulate its AI model to enforce subjective redlines on DoW’s use of the model, in ways that could cause serious harm to national security.”

Lin was skeptical of the Trump administration’s position early on. She issued a preliminary injunction blocking the government from cutting off Anthropic in March, after calling the moves “troubling” and “Orwellian.”