[Anthropic](/news/9UipXqHTV1YIfdyxB9lb) gets its first court win over the Pentagon’s supply-chain risk label

A federal judge in California has ruled that the Trump administration’s designation of Anthropic as a supply-chain risk was illegal, finding that the action violated the company’s constitutional rights and amounted to unlawful retaliation.
U.S. District Judge Rita Lin said Defense Secretary Pete Hegseth’s decision to label Anthropic a national security risk was “arbitrary and capricious.” She also found that the company was denied due process under the Fifth Amendment.

Why Anthropic was labeled a risk

Earlier this year, Hegseth and President Donald Trump designated Anthropic a supply-chain risk and ordered all federal agencies, including those outside the defense sector, to stop working with the company behind Claude.
The dispute followed Anthropic’s refusal to remove certain safety guardrails that would have allowed the Pentagon to use its models for fully autonomous weapons and mass surveillance of American citizens. The Pentagon said it would use Anthropic’s models only for lawful purposes and alleged that the company could attempt to control how the military used technology it had purchased.
Judge Lin rejected the government’s justification for the broad designation. She wrote that the government’s “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.”

Court finds retaliation, due-process violations

Lin pointed to what she described as inconsistencies in the government’s actions. Hegseth had proposed applying the Defense Production Act to Anthropic, a step that would characterize the company as essential to national security rather than a threat to it.
The Department of Defense also continued pursuing a contract with Anthropic and collaborated with the company on its new Mythos model for cybersecurity, according to the ruling.
The judge further noted that Anthropic “undisputedly lacks” backdoor access to its technology once it is handed over to the Department of Defense. While the government is free to choose its preferred AI vendor, Lin said the evidence showed that the measures imposed on Anthropic were “illegal and baseless.”
“The empty invocation of national security is not a blank check to punish and retaliate against government critics,” Lin added.
Anthropic welcomed the decision. “We remain focused on working productively with the government to harness AI for our national security so all Americans benefit from this technology,” a company spokesperson said in a statement.

A second Pentagon lawsuit remains

Anthropic filed two complaints against the Department of Defense in March, one in California and another in Washington, D.C. The California ruling represents a victory in the dispute, but the D.C. lawsuit is still ongoing.
The ruling does not prevent the Pentagon from choosing another AI provider. It does, however, reject the government’s use of the supply-chain risk designation against Anthropic under the circumstances described in the case.
TechCrunch has reached out to the Department of Defense for comment.