A US federal court has ruled that the Pentagon’s designation of Anthropic as a supply chain risk was illegal, CNBC reported. US District judge Rita Lin found that the US Department of Defense’s restrictions placed on the AI company and its Claude model were “illegal and baseless.” As part of the ruling, the judge barred certain federal agencies from enforcing President Trump’s order to stop using Anthropic’s tools. 

“The empty invocation of national security is not a blank check to punish and retaliate against government critics,” Judge Lin said in a 59-page decision. “Neither the Constitution nor the federal statute invoked by Defendants allows them to impose sweeping penalties based principally on Anthropic’s critique of the Administration’s views.”

“We welcome the court’s ruling that this supply chain risk designation was unlawful,” an Anthropic spokesperson told CNBC. “We remain focused on working productively with the government to harness AI for our national security so all Americans benefit from this technology.”

The dispute arose in late February, after the Department of Defense and its Secretary Pete Hegseth pressured Anthropic to remove certain safeguards from its AI systems. Anthropic’s CEO Dario Amodei, however, made it clear the company would refuse to allow its model to be used for mass surveillance or the development of autonomous weapons.

Late in February, Trump ordered all US government agencies to stop using Claude and other Anthropic services, escalating the feud. On social media, the president said there would be a six-month phase out period for federal agencies to migrate off of Anthropic’s products. Subsequent talks collapsed and Anthropic became the first US company to be designated as a supply chain risk. 

After saying it would challenge the decision, Anthropic sued the White House in two federal courts (for two separate designations) to reverse the ban. Today’s ruling by Judge Lin gave the company a victory on one of those counts, but Anthropic is still considered a supply chain risk pending the second decision. Even if it wins both cases, though, the Pentagon would not be required to restart its work with the company. 

The supply chain designation hasn’t slowed Anthropic’s march toward a likely near-record IPO later this year. Earlier this month, the company’s revenue surged to a record $11.5 billion, 14 times more than it earned in the same quarter last year. Engadget has reached out to Anthropic for additional comment.