Judge halts Trump ‘supply chain risk’ label on Anthropic

A federal judge in the Northern District of California granted Anthropic an injunction on Thursday, directing the Trump administration to withdraw its “supply chain risk” designation for the AI company and to pause an order requiring federal agencies to sever relationships. Judge Rita F. Lin issued the order on March 26 in San Francisco, concluding the directives likely conflicted with the company’s First Amendment protections while the case moves forward.

The dispute stems from negotiations over government use of Anthropic’s AI systems. Last month, talks with the Pentagon stalled after the company sought to limit certain applications, including bans on deploying its models in autonomous weapons and in broad, persistent surveillance. The Defense Department rejected those terms. The administration then labeled Anthropic a supply chain risk, a designation typically used for foreign entities viewed as security threats, and President Trump instructed agencies to end dealings with the firm.

During the hearing, Judge Lin remarked, “It looks like an attempt to cripple Anthropic,” referencing the impact of the designation and cutoff order. The court framed the measures as punitive and inconsistent with constitutional protections for a private company’s usage policies.

Anthropic filed suit soon after the designation, contesting the Defense Department’s actions and naming Defense Secretary Pete Hegseth. The complaint asserts that the government retaliated against the company’s content and usage standards rather than addressing a specific security issue.

In a statement after the ruling, Anthropic wrote: “We’re grateful to the court for moving swiftly, and pleased they agree Anthropic is likely to succeed on the merits. While this case was necessary to protect Anthropic, our customers, and our partners, our focus remains on working productively with the government to ensure all Americans benefit from safe, reliable AI.”

The White House in recent weeks has characterized Anthropic as “a radical-left, woke company” and claimed it is jeopardizing national security. Anthropic CEO Dario Amodei has described the Defense Department’s actions as “retaliatory and punitive.”

The injunction pauses enforcement of the designation and the cutoff order while litigation proceeds, maintaining existing contracts and partnerships. The order does not resolve the underlying claims and leaves final questions for later stages of the case.

The clash highlights growing friction over how AI vendors set guardrails for military and intelligence uses. Anthropic has pressed for contractual limits on high‑risk applications, including fully autonomous lethal systems and mass surveillance. Federal officials have argued that such limits could constrain mission needs inside government.

The supply chain risk label usually triggers broad procurement and security restrictions. Applying it to a U.S.-based AI vendor is uncommon. In granting relief, the court noted the absence of evidence that Anthropic’s technology or governance posed an immediate national security threat warranting the designation.

Further hearings are expected as both sides prepare to argue whether the government exceeded procurement and national security authorities in response to a private company’s usage policies and how the First Amendment applies in this context.