A US federal court has ruled that the Pentagon's designation of Anthropic as a supply chain risk was illegal and baseless. US District Judge Rita Lin found that the Department of Defense's restrictions placed on the AI company and its Claude model were unlawful, barring certain federal agencies from enforcing President Trump's order to stop using Anthropic's tools.

In a 59-page decision, Judge Lin stated, "The empty invocation of national security is not a blank check to punish and retaliate against government critics." An Anthropic spokesperson welcomed the ruling and said the company remains focused on working with the government to harness AI for national security.

The dispute arose in late February after the Department of Defense and Secretary Pete Hegseth pressured Anthropic to remove certain safeguards. CEO Dario Amodei refused, citing concerns over mass surveillance and autonomous weapons. Trump then ordered agencies to stop using Claude, with a six-month phase-out period, before Anthropic became the first US company designated a supply chain risk.

Anthropic won one of two federal court cases, but remains a supply chain risk pending the second decision. The Pentagon would not be required to restart work with the company even if it wins both. Meanwhile, Anthropic's revenue hit a record $11.5 billion, fueling a likely near-record IPO later this year.