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AI company Anthropic has won a major legal battle against the Trump administration after a US federal judge ruled that sanctions imposed against the company were unlawful and could not be used to punish it for publicly challenging government policy.
Judge Rita Lin issued the ruling on Thursday, finding that the government had relied on national security arguments to retaliate against Anthropic after the company refused to allow its artificial intelligence technology to be used for certain military applications.
The 59-page decision makes permanent an earlier temporary suspension of the sanctions. The federal government can still appeal the ruling.
Lin barred the federal agencies named in the lawsuit from enforcing an order issued by President Donald Trump that sought to prevent government agencies from using Anthropic’s technology.
She also overturned Defence Secretary Pete Hegseth’s designation of Anthropic as a “supply chain risk”, a classification that had previously been associated primarily with foreign companies.
The judge concluded that national security concerns could not be used as a justification for retaliating against a company because of its public criticism of government officials.
The decision represents a significant legal setback for the administration and could have wider implications for how the US government deals with technology companies that impose restrictions on the use of their products.
Anthropic welcomed the decision, saying the court had correctly determined that the supply-chain designation was unlawful.
The company said it remained committed to working with the US government and using artificial intelligence to support national security while ensuring the technology benefits Americans.
The ruling does not, however, resolve every dispute between Anthropic and the Pentagon.
A separate sanction imposed under federal procurement rules remains in effect while another legal challenge continues in Washington.
The confrontation between Anthropic and the Trump administration intensified after the company established restrictions on how its Claude AI models could be used by the US military.
Anthropic refused to permit Claude to be used for fully autonomous lethal weapons or mass surveillance of Americans.
The decision drew a sharp response from Trump, who publicly attacked the company and described it as a politically motivated and “out-of-control” organisation.
The administration subsequently moved against Anthropic, including the supply-chain risk designation that affected its military contracts and restricted other Pentagon contractors from using its technology.
The dispute was complicated by the fact that Claude had already been used in sensitive US government and military operations.
Reports from the Wall Street Journal and Axios said Anthropic’s technology had been deployed in classified and sensitive systems.
Those reports also indicated that Claude was used during a January US operation involving the capture of Venezuelan leader Nicolás Maduro.
The reports highlighted the increasingly important role that commercial AI systems are playing in national security operations and raised questions about how governments should handle restrictions imposed by private technology companies.
The conflict has also exposed a deeper disagreement over the risks associated with advanced artificial intelligence.
Anthropic chief executive Dario Amodei has repeatedly warned about the potential dangers of rapidly developing AI technology. His concerns have included the impact of AI on employment and the possibility that increasingly capable systems could create significant risks if they are not properly controlled.
Those warnings have occasionally placed the company at odds with officials seeking to accelerate the use of AI across government and defence.
The court case therefore extends beyond a dispute over a single contract. It raises broader questions about whether technology companies should be able to set limits on government use of their systems and whether governments can penalise firms for doing so.
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Although Anthropic secured a major victory Thursday, the company has not won every aspect of its legal fight.
A separate Pentagon measure remains in force after another federal judge declined to suspend it in April. That means the dispute between Anthropic and the US government is not yet completely resolved.
The government also retains the option of appealing Thursday’s ruling, potentially prolonging the legal battle.
For Anthropic, however, the decision provides an important defence against the government’s attempt to classify the company as a supply-chain security threat.
The legal victory comes as Anthropic prepares for another potentially transformative moment.
The company is reportedly expected to pursue a public stock-market listing in the coming weeks, in what could become one of the largest technology IPOs in history.
Investor interest in Anthropic reflects the rapid growth of the artificial intelligence industry and the enormous commercial value being placed on leading AI developers.
The court ruling could further strengthen the company’s position as it navigates its relationship with Washington, investors and the rapidly expanding global AI market.
For now, the decision establishes an important principle: the government cannot simply invoke national security to punish a private company for disagreeing with its policies.
The continuing legal dispute between Anthropic and the Pentagon is likely to remain closely watched as the US government expands its reliance on artificial intelligence for defence and national security.
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