A federal judge in California temporarily blocked the Pentagon from blacklisting Anthropic as a national security supply chain risk on Thursday, August 28, 2026, ruling that the administration’s punitive measures violated First Amendment free speech protections and denied due process under the Fifth Amendment.
The legal showdown centers on an unprecedented procurement designation that barred defense contractors from working with the artificial intelligence company. U.S. District Judge Rita Lin issued a preliminary injunction on Thursday, August 28, 2026, finding that the government’s action appeared designed to penalize the firm for its public disagreements over military artificial intelligence applications, according to reporting from CNBC.
U.S. District Judge Rita Lin granted Anthropic’s request for a preliminary injunction, finding that the Trump administration’s broad punitive measures against the company were likely unlawful and could cripple Anthropic.
Nothing in the governing statute supports the Orwellian notion that an American company may be branded a potential adversary and saboteur of the US for expressing disagreement with the government, Lin wrote in her ruling.
First Amendment Retaliation and Constitutional Protections
Judge Lin’s 43-page ruling delivered a sharp rebuke to the Trump administration, declaring that branding an American company as an adversary and saboteur for expressing policy disagreements violates constitutional safeguards. The court found that the record supported an inference that Anthropic was targeted for criticizing the government’s contracting positions in public.
“Punishing Anthropic for bringing public scrutiny to the government’s contracting position is classic illegal First Amendment retaliation.”
The dispute centers on the Pentagon’s demand to use Anthropic’s Claude AI for all lawful purposes, while Anthropic wanted to prohibit the military from using it for mass domestic surveillance or for fully autonomous weapons systems. After Anthropic refused to meet the government’s demands, President Donald Trump and Secretary of Defense Pete Hegseth said they would declare the company a supply chain risk, prohibiting the use of its products in defense contract work. Anthropic responded with a lawsuit filed earlier this month in federal court challenging the designation, calling it an unprecedented and unlawful action.
Secretary of War Pete Hegseth overstepped his authority when he designated Anthropic a national security supply-chain risk, a label the government can apply to companies that expose military systems to potential infiltration or sabotage by adversaries. Anthropic alleged the government violated its right to free speech under the First Amendment by retaliating against its views on AI safety, and said it was not given a chance to dispute the designation, in violation of its Fifth Amendment right to due process.
Contradictory Government Positions and Legal Arguments
U.S. District Judge Rita Lin, an appointee of former U.S. president Joe Biden, agreed with the company in a 43-page ruling, but said it would not take effect for seven days to give the administration a chance to appeal. Much of the hearing centered on a post Defense Secretary Pete Hegseth made on X declaring that no military contractor, supplier, or partner could conduct any commercial activity with Anthropic. It took a federal judge to clarify that no, the designation doesn’t apply to a company whose only military connection is selling the Pentagon toilet paper. The government’s own lawyer conceded during the oral argument that the post had absolutely no legal effect at all.
Photo: CNETJudge temporarily blocks Pentagon from labeling Anthropic a "supply chain risk"
In January, Hegseth issued a memo demanding all military AI vendors grant the Pentagon any lawful use of their technology. Lin directed the DOD to rescind all guidance, directives, communications or instructions that it issued against the company.
“Defendants claim that because of Anthropic’s ‘increasingly hostile manner through the press’ and its criticism of the Department of War’s views on AI use, Defendants ‘cannot trust Anthropic to ensure the integrity of its models.'”
Lin wrote that neither the Constitution nor the federal statute invoked by Defendants allows them to impose sweeping penalties based principally on Anthropic’s critique of the Administration’s views. In March, the DOD designated Anthropic a supply chain risk, meaning the company purportedly threatened U.S. national security, after negotiations about how the military could use its Claude AI models spiraled out of control.
The blacklisting campaign has inflicted severe financial damage on the artificial intelligence developer. Anthropic argued it has already suffered damages in the hundreds of millions because of this whole fiasco. But this preliminary injunction isn’t the last word—and who ultimately wins is still very much up in the air.
Photo: CNBC
While Thursday’s ruling halts enforcement of the Pentagon blacklist and vacates the supply chain risk designation, the legal battle remains active. Judge Lin put her order on hold for seven days to allow the administration an opportunity to challenge the injunction.
US judge blocks Pentagon's Anthropic blacklisting for now
