Judge Rules Trump Administration Illegally Retaliated Against Anthropic Over AI Red Lines

A federal judge has ruled that the Trump administration illegally punished Anthropic for publicly refusing to let the military use its Claude LLM for tasks including mass surveillance of Americans and lethal autonomous warfare.

The dispute began when the Pentagon told Anthropic to strip all usage restrictions and accept a clause permitting “all lawful uses.” Anthropic dropped most of them and held two red lines. On February 27, Trump ordered every federal agency to stop using the company’s technology, calling it a “RADICAL LEFT, WOKE COMPANY” on Truth Social. Hegseth followed, accusing Anthropic in a tweet of “a master class in arrogance and betrayal” and barring any military contractor from doing business with it.

What the record showed

The government has since abandoned its central claim. Its risk assessment rested on Anthropic having backdoor access to deployed models, and it now concedes Anthropic has no such access and that Claude is no riskier than any other “black box” system. That left one factor: trust, forfeited by what a Pentagon memo called Anthropic’s “increasingly hostile manner through the press.”

Lin found the timeline gave that away. Days before the blacklisting, Hegseth had floated invoking the Defense Production Act, which would have made Anthropic essential to national security. The day after the designation, an under secretary emailed the company to say a contract was “very close.” The government is still discussing collaboration on Mythos, Anthropic’s newest model, across sensitive contexts, Lin added.

“The empty invocation of national security is not a blank check to punish and retaliate against government critics,” Lin wrote, finding the actions retaliatory under the First Amendment, imposed without the pre-deprivation process the Fifth Amendment requires, outside the supply chain statute, and arbitrary and capricious.

Anthropic did not win everything. Lin rejected its argument that Trump’s directive exceeded presidential authority, and entered judgment for agencies that took no action.

She vacated the designation and Hegseth’s boycott order, granted a permanent injunction, and denied the government’s request for a seven-day administrative stay, noting it had operated under a preliminary injunction since March without identifying any harm.

Anthropic told the court the measures, left standing, would cut its defense-related revenue by 50% to 100% and its 2026 revenue by billions.