A federal court has ruled against the Trump administration's labeling of Anthropic as a supply chain risk, with a judge accusing the federal government of unlawfully retaliating against the artificial intelligence company.
According to TechCrunch, U.S. District Court Judge Rita Lin said in her ruling that Anthropic was denied due process, and that Defense Secretary Pete Hegseth's decision to attach the supply chain risk label to the company was "arbitrary and capricious." Hegseth applied the designation to Anthropic in early March, after the company refused to allow its AI to be used for mass surveillance of Americans, and for autonomous lethal weapons.
Judge Lin temporarily blocked enforcement of Hegseth's order weeks after it was issued. Her decision issued on August 27 permanently overturned the mandate, pending any potential appeal from the Trump administration. Lin ultimately ruled that the government's "words and deeds confirm that the challenged actions were based on a desire to make a public example out of Anthropic for its 'arrogance' in criticizing the government."
"The evidence demonstrates that the broad measures imposed on Anthropic were illegal and baseless,” Lin said. “The empty invocation of national security is not a blank check to punish and retaliate against government critics."
Any company labeled by the government as a supply chain risk is effectively viewed as a national security risk, and federal systems or federal contractors are barred from using its products or services. Historically, the label has exclusively been used for companies with ties to foreign adversaries, rather than American firms. A coalition of tech companies that included Nvidia, Google, Microsoft, Apple and Amazon sent a letter to Hegseth in early March, to voice concerns over the breaking of that precedent.
