A federal judge in California on Thursday permanently barred the Trump administration from enforcing rules that cut off artificial intelligence firm Anthropic from federal contracts, ruling the actions violated the company’s constitutional rights. U.S. District Judge Rita Lin issued a 59-page order declaring the Pentagon’s designation of Anthropic as a supply chain risk to national security was unlawful and amounted to unlawful retaliation in violation of the First Amendment and Fifth Amendment due process rights.
The ruling marks a decisive legal victory for Anthropic, which sued the government in March alleging that directives from administration officials—including Defense Secretary Pete Hegseth—violated its free speech and due process rights. The company had argued that its technology should not be used for fully autonomous weapons or mass domestic surveillance, a stance that drew public criticism from Trump administration officials who maintained the military must have unrestricted access to AI for all lawful purposes.
Core Facts of the Ruling
Judge Lin’s order overturned Hegseth’s directive requiring all Pentagon contractors to cease doing business with Anthropic, finding the action violated the Administrative Procedure Act and lacked legal justification.
The court ruled that the administration’s actions were based on retaliation for Anthropic’s protected speech, not national security concerns, and that the company was denied due process in the designation process.
Background and Legal Context
Anthropic filed two lawsuits in response to the administration’s actions. The first, filed in March, challenged the supply chain risk designation and public disparagement by officials. The second lawsuit, still pending before the U.S. Court of Appeals for the District of Columbia Circuit, remains unresolved. The company has stated it remains committed to working with the government on AI for national security, emphasizing benefits for all Americans.
Government Response and Unresolved Questions
The Pentagon did not immediately respond to requests for comment on the ruling. The administration had argued that its actions were necessary to safeguard national security, asserting that Anthropic’s AI model, Claude, posed risks if restricted in military applications. Judge Lin acknowledged the government’s deference in national security matters but found that the administration’s actions were not justified by any articulable evidence of risk.
Implications for AI Policy and Free Speech
The ruling raises broader questions about the intersection of AI regulation, government contracting, and constitutional protections for corporate speech. It also underscores ongoing tensions between the Trump administration’s push for expanded military AI use and tech companies’ efforts to impose ethical guardrails on their products. The decision does not compel the government to use Anthropic’s technology but requires any future actions against the company to comply with constitutional and regulatory standards.
Anthropic’s spokesperson welcomed the ruling, stating the company remains focused on productive collaboration with the government to advance AI for national security. The administration has not indicated whether it plans to appeal the decision.