A Judge Has Blocked the Pentagon’s Attempt to Blacklist Anthropic

On Thursday, a federal judge blocked the Pentagon from blacklisting Anthropic based on concerns about its AI models, declaring the designation unconstitutional retaliation. US District Judge Rita Lin vacated the February 27 decision by Defense Secretary Pete Hegseth, which labeled Anthropic a "supply-chain risk" and barred the company from federal contracts.

Lin also lifted an additional punitive measure preventing contractors from doing business with Anthropic, calling it "arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with law."

The judge ruled that nine agencies, including the Pentagon and others, had improperly imposed sanctions on Anthropic. While the ruling removes those penalties, Lin affirmed the Pentagon's right to choose its AI vendor but did not prevent the department from using other models.

Anthropic's spokesperson welcomed the court's ruling, stating the company remains focused on working productively with the government to harness AI for national security. The case began when the Pentagon and Anthropic clashed over a $200 million deal to use Anthropic's Claude models for military applications. The dispute intensified after reports that Anthropic's models were used in the operation to capture Venezuelan President Nicolas Maduro in early 2022.

An Anthropic staffer had relayed concerns from a Palantir employee about the potential misuse of its models. In February, negotiations broke down, and Hegseth implemented the "supply chain risk" designation, claiming it was necessary to prevent any potential misuse of classified systems. Anthropic challenged the Pentagon's actions in federal court, alleging violations of its First and Fifth Amendment protections. The DC case is still ongoing.