A federal judge has ruled that the U.S. Department of Defense acted unlawfully when it designated the artificial intelligence company Anthropic as a supply chain risk, calling the move "illegal and baseless."
US District Judge Rita Lin stated in her ruling that invoking national security does not grant a "blank check to punish and retaliate against government critics." Anthropic, the creator of the AI model Claude, had argued in its lawsuit that Defense Secretary Pete Hegseth overstepped his authority with the designation. This action followed Anthropic's refusal to allow the U.S. military to employ its AI models for purposes such as surveillance or autonomous weapons.
Anthropic's lawsuit characterized the government's actions as both "unprecedented and unlawful." The designation, which identified Anthropic as a supply-chain risk, cited a law intended to safeguard military systems from foreign sabotage. This marked the first instance of a U.S. company being publicly labeled as such.
The AI startup asserted that its models were not sufficiently reliable for safe integration into military weapons systems. Furthermore, the company expressed opposition to its AI being used for domestic surveillance, viewing it as a violation of rights.
At the time of the designation, the Pentagon contended that private companies should not have the power to restrict military operations. The White House had previously described Anthropic as a "radical left, woke company" attempting to dictate military activities, asserting that the military is bound by the U.S. Constitution, "not any woke AI company's terms of service."
Anthropic executives estimated that the designation could result in billions of dollars in lost business and reputational damage to the company.