A federal judge has temporarily halted the U.S. government's efforts to blacklist AI company Anthropic, delivering a significant early win for the startup in its legal battle with the Pentagon and the Trump administration. Judge Rita Lin of the Northern District of California granted a preliminary injunction on Thursday, finding that Anthropic is likely to prove the government's actions constituted illegal retaliation against the company's public statements.

The case stems from a series of escalating moves in February. First, President Trump ordered federal agencies to stop using Anthropic's Claude models. Then, Defense Secretary Pete Hegseth formally designated the company a "supply chain risk," a label previously applied only to foreign firms, alleging its technology threatened national security. The designation forced major defense contractors to certify they weren't using Claude.

In her order, Judge Lin sharply criticized the government's rationale. "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," she wrote. The judge characterized the punishment as "classic illegal First Amendment retaliation."

The dispute originated during contract negotiations last fall. Anthropic, which had a $200 million deal with the Pentagon, was discussing deploying Claude on military networks. Talks broke down over the scope of access; the Department of Defense sought broad rights, while Anthropic sought limits on uses like autonomous weapons and domestic surveillance.

Anthropic stated it was "grateful to the court for moving swiftly" and that its focus remains on working with the government. The injunction pauses the ban and blacklisting while the lawsuit proceeds. A separate legal challenge to the "supply chain risk" designation is underway in a Washington appeals court. A final resolution is likely months away.

Source: CNBC