Court Casts Doubt on the “Supply-Chain Risk” Label for Anthropic

Federal Judge Rita Lin said at a hearing on Thursday that the Trump administration had failed to present enough evidence to reasonably label Anthropic a “supply-chain risk” and bar federal agencies from using the company's technology. Bloomberg and Axios were the first to report on the proceedings.

How the dispute arose

The conflict grew out of stalled contract negotiations between Anthropic and the U.S. Department of Defense. The company said it did not want its AI used for mass surveillance of Americans or for targeting and lethal-force decisions, citing the fact that the technology is not ready for that. The Pentagon countered that a private company should not dictate to the military how to use technology, and pledged to deploy the tools solely in “lawful” ways.

The government's dubious arguments

Separately, the government argued that Anthropic's public criticism of the Pentagon in itself justified the ban. Judge Lin called that logic “genuinely troubling,” warning that it could set a precedent for retaliating against contractors who disagree with the administration.

The Department of Defense also claimed that Anthropic could supposedly shut down or alter its AI models in the middle of combat operations. According to experts, there is no evidence for this, and the judge agreed: she saw no proof that the company could modify a model it had already delivered or “flip some kind of switch.”

What comes next

Thursday's hearing is part of one of two lawsuits Anthropic filed against the Pentagon in March: the company is challenging both the ban itself and the risk status assigned to it. The second case is being heard in Washington. Lin, who back in March temporarily blocked the ban, is now deciding whether to make the measure permanent.

Source: TechCrunch