A federal judge in California hammered the Pentagon on Tuesday for its decision to label Anthropic a supply chain risk, signalling skepticism over what she described as a “troubling” move from the federal government.
U.S. District Judge Rita Lin, based in San Francisco, suggested during Tuesday’s hearing that the Defense Department’s determination “looks like an attempt to cripple Anthropic.” Lin added she is specifically concerned about whether the AI company is “being punished for criticizing the government’s contracting position.”
The hearing centered on Anthropic’s request to the court to temporarily halt the Pentagon’s supply chain risk designation. The AI company argues the designation, typically reserved for foreign adversaries, will cause it “irreparable harm.”
Anthropic accused the Trump administration of retaliating against the company for what it believes are “protected viewpoints” regarding how its AI technology can safely and reliably be used. The Pentagon and Anthropic’s contract negotiations fell apart last month following a disagreement over guardrails on the use of AI for autonomous weapons and mass domestic surveillance.
Lin in opening remarks noted it is not the court’s role to determine what AI can safely be used for, but whether the government violated the law by labeling the Pentagon a supply chain risk. The court is also considering the directive from President Trump, who ordered federal agencies to “immediately cease” using Anthropic’s products through a social media post.
“What is troubling to me about these reactions is that they don’t really seem to be tailored to the national security concern,” Lin said. “If the worry is about the integrity of the operational chain of command, DOW [Department of War] could just stop using Claude. It looks like defendants went further than that because they were trying to punish Anthropic.”
Lin went through most of the questions she gave the parties on Monday, including whether Defense Secretary Pete Hegseth’s Feb. 27 social media post about the designation had any legal effect.
In that post, Hegseth announced the designation and declared, effective immediately, “no contractor, supplier, or partner that does business with the United States military may conduct any commercial activity with Anthropic.”
Hegseth added in that post “this decision is final,” but Eric Hamilton, deputy assistant attorney general for the Justice Department’s Civil Division, appeared to contradict the secretary’s wording.
“No entity would face liability for noncompliance with the post,” Hamilton told the court Tuesday. “This was a social media announcement that DOW would be taking action.”
Lin said she found the Department of Justice’s (DOJ) position “pretty surprising,” asking again whether Hegseth’s statement is “not true” and a “false statement.” The DOJ argued Hegseth’s previous wording, which stated he was “directing” the Department of Defense to designate Anthropic a supply chain risk, implied pending action.
“You’re standing here saying, ‘We said it, but we didn’t really mean it,’” Lin added. The DOJ said it clarified Hegseth’s statement in court filings in California, as well as in the case in the D.C. Court of Appeals.
Anthropic’s attorney, Michael Mongan, said he appreciated the “concessions” of the DOJ, but he noted they came 25 days after Hegseth’s directive was published.
“It went out in a very public way,” Mongan said. “Last time I looked, it was read over by 13 million people.”
Mongan argued the average person, military contractor, or prospective consumer would take Hegseth’s social media post as a “final decision,” as that is “exactly what it says.”
The two sides clashed over whether the Pentagon met congressional notification requirements, the definition of the word “adversary,” and why the Trump administration chose the designation over just cutting the contract.
Lin requested Anthropic hand over evidence of federal civilian agencies’ terminating Anthropic by later Tuesday night, and gave the DOJ one day to respond. Lin said she will have a ruling on the preliminary injunction in the coming days.
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