Judge Rules that Pete Hegseth's Pentagon Illegally Retaliated Against Anthropic

Elizabeth Frantz / REUTERS A federal judge has ruled that Pete Hegseth’s Defense Department illegally retaliated against Anthropic and tried to “make a public example” out of the AI company for criticizing the government.

President Donald Trump’s administration declared Anthropic a supply chain risk earlier this year after the company refused to let the Pentagon use its AI models for mass surveillance against Americans or the development of deadly autonomous weapon systems.

The designation, which had previously been reserved for foreign adversaries, barred the Pentagon from using Anthropic’s models and required all military contractors to certify that they didn’t use Anthropic tools in their own workflows.

The company filed two lawsuits in March arguing the label was “unprecedented and unlawful,” while the Pentagon said at the time that private companies should not be able to constrain military action.

Judge Rita Lin of the U.S.

District Court in Northern California sided with Anthropic in a ruling Thursday, writing that the government’s blacklisting of the San Francisco-based company was a violation of its First Amendment and due process rights.

“The empty invocation of national security is not a blank check to punish and retaliate against government critics,” wrote Lin, a Joe Biden appointee.

The government’s decision was “based on a desire to make a public example out of Anthropic for its ‘arrogance’ in criticizing the government,” she added.

Other government departments continued working with Anthropic tools even after the supply chain risk designation, which undermined the administration’s claim that it feared the company would “poison its software to harm national security,” Lin wrote.

The ruling came after Lin had issued a preliminary order blocking the supply chain risk designation, which she said at the time was “likely both contrary to law and arbitrary and capricious.” Anthropic said in a statement that it “welcomed the court’s ruling” and “remained focused on working productively with the government to harness A.I. for our national security so all Americans benefit from this technology.” The Daily Beast has reached out to the Pentagon for comment.

Anthropic previously had a $200 million contract with the Pentagon, and as of February, its Claude LLM was the only AI model available in the military’s classified systems, Axios reported.

After Anthropic refused to give the military unfettered use of its models, Hegseth met with CEO Dario Amodei to issue an ultimatum .