A federal judge in San Francisco has temporarily blocked the US Pentagon from labeling artificial intelligence firm Anthropic a “supply chain risk.” The ruling, issued recently by US District Judge Rita Lin, halts a directive from President Trump and Defense Secretary Pete Hegseth that aimed to blacklist the company from defense contracts.
The court found that the government’s attempt to brand the American AI lab as a national security threat likely overstepped legal authority. Judge Lin described the measures as “Orwellian,” noting that the designation appeared to be a punitive response to Anthropic’s refusal to allow its Claude AI model to be used for autonomous lethal warfare and mass domestic surveillance.
This ruling highlights an ongoing conflict between Silicon Valley and the government regarding AI ethics and national security, setting a potential precedent for how the US regulates domestic AI vendors.
Court challenges “supply chain risk” designation
Anthropic filed the lawsuit earlier this month, alleging that the supply chain risk label, traditionally reserved for foreign entities like Huawei, violated its First Amendment right to free speech and its Fifth Amendment right to due process. The company argued the designation was a retaliatory strike following a breakdown in contract negotiations over AI safety guardrails. In her 43-page ruling, Judge Lin noted that if the Pentagon’s primary concern was the “integrity of the operational chain of command,” it could simply stop using Claude.
Instead, the broad measures appeared designed to stop Anthropic by barring all federal contractors from using the company’s technology. This legal victory follows months of tension between Silicon Valley and the Trump administration regarding the military’s use of AI. While competitors like OpenAI have reportedly reached agreements with the Pentagon, Anthropic has maintained strict red lines against using its models for autonomous weapons systems.
Industry Tension Over AI Ethics and Military Use
This clash shows broader industry concerns regarding the balance between rapid AI deployment and ethical safeguards. According to previous reports from DeFi Planet, Anthropic CEO Dario Amodei has reportedly reopened negotiations with the United States Department of Defense in a last-minute effort to maintain access to Pentagon contracts and avoid being designated a supply chain risk by the administration of Donald Trump.
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