Judge Stays Pentagon’s Labeling of Anthropic as ‘Supply Chain Risk’

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Judge Stays Pentagon’s Labeling of Anthropic as ‘Supply Chain Risk’

The decision is an early victory for the artificial intelligence company in a rancorous legal battle with the Department of Justice.

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The San Francisco office of Anthropic, which won a temporary reprieve on Thursday in federal court.

Credit...

Marissa Leshnov for The New York Times

By

Mike Isaac

Mike Isaac covers artificial intelligence and Silicon Valley from San Francisco.

March 26, 2026,

7:47 p.m. ET

A federal judge on Thursday temporarily stopped the Department of Defense from labeling Anthropic as a security risk, in a reprieve for the artificial intelligence start-up and its work with the federal government.

In the ruling, Judge Rita F. Lin of the U.S. District Court for the Northern District of California said Anthropic would not be restricted from continuing with its federal contracts for now. The ruling is not a final decision, as the case continues.

The case stems from

a dispute between the Pentagon and Anthropic

this year over a $200 million contract and the use of A.I. in warfare. During the contract negotiations, Anthropic wanted certain limits imposed on its A.I.’s being used for surveillance and autonomous weapons, while the Department of Defense argued that no private contractor could tell it how to use technology.

Defense Secretary Pete Hegseth then labeled Anthropic a “

supply chain risk

,” a designation typically applied to foreign companies that pose national security concerns. The label effectively blacklists a company from doing business with U.S. government entities.

Anthropic subsequently

filed two lawsuits

— one in the court in California and one in the U.S. Court of Appeals for the District of Columbia Circuit — accusing the Pentagon of using the designation inappropriately to punish the company on ideological grounds.

The outcome has implications for A.I. use in war and raises questions about whether the Trump administration could assign the same label to other technology companies that may disagree with how the government is using their products. Microsoft and some employees of OpenAI and Google filed amicus briefs in support of Anthropic in the case.

An Anthropic spokeswoman said that the company was “grateful to the court for moving swiftly” and that its focus “remains on working productively with the government to ensure all Americans benefit from safe, reliable A.I.”

A Department of Defense spokesman did not immediately respond to a request for comment.

Anthropic, which is led by Dario Amodei, has long said A.I. must have limits for safety reasons. In the case, Anthropic argued that the Pentagon was not only punishing it on ideological grounds but also violating its First Amendment rights by slapping the label on it after the company spoke out.

Anthropic added that its business was suffering “irreparable harm” from the designation, and asked the courts for a temporary stay while it continued to argue its cases.

In response, the Department of Defense said in a

legal filing

that Anthropic posed an “unacceptable risk” to national security because the start-up could disable or alter its technology to suit its own interests, rather than the country’s priorities, in a time of war. That meant Anthropic was a supply chain risk, the Department of Defense said.

At a hearing in San Francisco on Tuesday, Judge Lin appeared skeptical of the Pentagon’s arguments for applying the label to Anthropic.

“It looks like an attempt to cripple Anthropic,” she said.

Mike Isaac is The Times’s Silicon Valley correspondent, based in San Francisco. He covers the world’s most consequential tech companies, and how they shape culture both online and offline.

See more on:

Anthropic AI LLC

,

U.S. Department of Defense

,

Dario Amodei

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