Judge blocks Pentagon's supply chain risk label on Anthropic

US District Judge Rita Lin ruled on Thursday 27 August 2026 that the Pentagon's designation of Anthropic as a "supply chain risk" was unlawful and ordered it removed. Lin, who sits in the Northern District of California, said the label amounted to retaliation against the company over its safety policies.

Lin said Defense Secretary Pete Hegseth's designation violated the First Amendment, was "arbitrary and capricious", and denied Anthropic due process under the Fifth Amendment.

She described the government's evidence of a national-security risk as "slim" and noted the Pentagon kept trying to work with Anthropic even after applying the label.

"The empty invocation of national security is not a blank check to punish and retaliate against government critics," Lin said.

The dispute began after Anthropic refused to let the Pentagon use its models for fully autonomous weapons or for mass surveillance of Americans. Hegseth then posted that no military contractor, supplier or partner could do business with Anthropic, according to the notes.

The "supply chain risk" designation had almost always been used against companies tied to foreign adversaries. This marked the first time it was applied to a US company over a policy dispute, according to the notes.

Anthropic sued in March 2026, and Lin had already granted a preliminary injunction that month blocking the designation before Thursday's final ruling. An Anthropic spokesperson said: "We welcome the court's ruling that this supply chain risk designation was unlawful."

A second, related Anthropic lawsuit is still pending in Washington, DC, and the government retains the option to appeal Thursday's ruling.

CNBC reported the decision; NPR also covered the ruling.