Federal Judge Grants Anthropic Preliminary Injunction against Pentagon

A federal judge granted Anthropic's request for a preliminary injunction against the Pentagon, halting its unprecedented "supply chain risk" designation that barred the AI Company from federal contracts.

A federal judge in San Francisco on Thursday granted Anthropic's request for a preliminary injunction against the Pentagon, temporarily halting the Defense Department's unprecedented "supply chain risk" designation that had barred the artificial intelligence company from federal contracts.

U.S. District Judge James Donato ruled that Anthropic had demonstrated a "substantial likelihood" of succeeding on its claims that the Pentagon violated the company's due process rights when it labeled the AI firm a national security threat without providing adequate notice or opportunity to respond.

"The government's actions raise serious constitutional questions," Donato wrote in a 28-page opinion. "Labeling a domestic company a 'supply chain risk' without meaningful process undermines the very principles the government claims to protect."

The preliminary injunction allows Anthropic to resume contracting with the federal government while its lawsuit proceeds. The Pentagon had designated Anthropic a supply chain risk on Feb. 27 after contract negotiations broke down over the company's refusal to allow its Claude AI model to be used for autonomous weapons and mass surveillance.

Defense Secretary Pete Hegseth ordered all federal agencies to cease using Anthropic's technology, and the company's CFO warned the designation could cost it "hundreds of millions" in revenue this year.

Donato rejected the government's argument that the designation was necessary for national security. "The record shows the government made no finding of an actual or imminent threat to national security," he wrote. "It simply disagreed with the company's terms of service."

The ruling is a significant victory for Anthropic, which had argued the designation was retaliation for its refusal to modify its AI policies. The company's lawsuit, filed March 9, claims the Pentagon's action violates the Administrative Procedure Act and the First and Fifth Amendments.

A Pentagon spokesperson said the department is reviewing the decision and evaluating its options. The preliminary injunction remains in effect while the case proceeds to trial.

As a federal judge grants Anthropic's request to block the Pentagon's unprecedented 'supply chain risk' designation, The Silicon Review examines what this ruling means for the balance between national security claims and constitutional protections and how private companies can fight back when the government labels them a threat without due process.