US Federal Judge Rita Lin ruled on August 27 or 28, 2026, that the Pentagon’s designation of Anthropic as a supply chain risk was unlawful and violated constitutional rights and federal law, invalidating the blacklisting and lifting sanctions imposed by nine federal agencies including the Pentagon, Treasury, State, and Homeland Security [1, 2, 3, 4].

The blacklisting followed a February 27 Pentagon decision by Defense Secretary Pete Hegseth labeling Anthropic a supply chain risk and barring military contractors from working with the company [1, 2, 3, 4]. Shortly after, President Donald Trump ordered federal agencies to stop using Anthropic's AI technology, allowing a six-month phase-out period for current users [1, 4].

Judge Lin described the Pentagon’s actions as "arbitrary and capricious," "illegal and baseless," and an abuse of discretion. She said, "The broad measures imposed on Anthropic were illegal and baseless," and that "The empty invocation of national security is not a blank check to punish and retaliate against government critics" [1, 2, 3, 4].

Anthropic challenged the Pentagon’s designation and Trump’s agency order in two federal court cases filed in March 2026. Judge Lin had earlier issued a preliminary injunction blocking enforcement of some blacklisting measures while litigation proceeded [1, 4]. The latest ruling fully blocks enforcement of the sanctions and the agency phase-out order.

The blacklisting was retaliation after Anthropic refused military requests to remove safeguards on its Claude AI model to enable mass domestic surveillance and fully autonomous weapons. Anthropic CEO Dario Amodei had publicly refused to allow such use of its technology [1, 2, 3, 4].

An Anthropic spokesperson said, "We welcome the court’s ruling that this supply chain risk designation was unlawful. We remain focused on working productively with the government to harness AI for our national security" [2].

The Pentagon is not obligated to use Anthropic’s AI models following the ruling and may continue choosing other vendors [2, 4]. Anthropic also has ongoing litigation in a separate federal appellate case challenging the supply chain risk designation [3].

The disputed Pentagon-AI contract deal with Anthropic was valued around $200 million [2]. The six-month phase-out period Trump ordered remains suspended by the court’s ruling at least until litigation concludes [1, 4].