A U.S. federal judge in San Francisco has granted Anthropic a temporary reprieve after the Pentagon labeled it a supply chain risk.
In a Thursday ruling, Rita Lin of the U.S. District Court for the Northern District of California issued a preliminary injunction against the Pentagon’s designation. The order also pauses a directive from Donald Trump that had instructed federal agencies to stop using Anthropic’s chatbot, Claude.
“Nothing in the governing statute supports the Orwellian notion that an American company may be branded a potential adversary and saboteur of the U.S. for expressing disagreement with the government,” Judge Lin wrote.
According to Menlo Ventures, Anthropic held a leading 32% share of the enterprise AI market in 2025, ahead of OpenAI at 25%, a position that could be significantly impacted by a government-wide ban.
The judge added that the “broad punitive measures” taken by the Trump administration and Defense Secretary Pete Hegseth appeared “arbitrary, capricious, [and] an abuse of discretion.”
The ruling follows a lawsuit filed by Anthropic on March 9 in a federal court in Columbia, arguing that Hegseth exceeded his authority by designating the company a national security supply-chain risk.
The dispute traces back to a July 2025 agreement between Anthropic and the Pentagon to make its Claude model the first frontier AI approved for use on classified networks.
Talks broke down in February when the Pentagon sought to renegotiate the deal, pushing for permission to use Claude “for all lawful purposes” without restrictions.
Anthropic resisted, maintaining that its technology should not be deployed for lethal autonomous weapons or large-scale domestic surveillance of Americans.
On Feb. 27, Donald Trump ordered federal agencies to stop using Anthropic’s products, criticizing the company’s stance in a post on Truth Social.
During a 90-minute hearing in San Francisco on March 24, Rita Lin questioned government lawyers on whether the company was being penalized for publicly challenging the Pentagon.
In her March 26 ruling, Lin described the situation as “classic illegal First Amendment retaliation,” stating that punishing Anthropic for drawing public attention to the government’s contracting position was unlawful.
Anthropic welcomed the decision, saying it was grateful for the court’s swift action and confident it would ultimately prevail on the merits.
