US federal judge halts Pentagon plan to label Anthropic 'supply chain risk'

A federal judge in San Francisco has granted Anthropic’s seeking a temporary court order in its lawsuit against the Trump administration.

U.S. District Judge Rita Lin penned a 43-page ruling.

She ruled, "Nothing in the government statute supports the Orwellian notion that an American company may be branded a potential adversary and saboteur of the U.S. for expressing disagreement with the government.”

Lin further wrote, “Punishing Anthropic for bringing public scrutiny to the government’s contracting position is classic illegal First Amendment retaliation.”

Liun, an appointee of former President Joe Biden, said she would delay implementation of her ruling for one week to allow the administration the right to appeal.

The ruling is seen as the latest blistering court opinion against Defense Secretary Pete Hegseth.

Anthropic hailed the ruling on Thursday, March 26, 2026, in a statement.

The company stated, “We’re grateful to the court for moving swiftly and pleased they agree Anthropic is likely to succeed on the merits.”

The spokesperson for the company added, “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.”

What sparked the feud between Pentagon and Anthropic?

The feud between DOD and Anthropic was first reported earlier this month, following a dramatic couple of weeks in Washington, D.C.

The issue came to public light when, in late February, Defense Secretary Pete Hegseth labeled Anthropic as a “supply chain risk” in a post on X (formerly Twitter).

Following the post, the DOD in early March officially designated Anthropic

Anthropic had inked a $200 million deal with the Pentagon in July this year.

But as the company began negotiating Claude’s deployment on the DOD’s GenAI.mil AI platform in September, the talks were hit with the “supply chain risk" title.

Both the parties failed to settle their dispute through resolution, it led to the court filing, and now the matter is being heard in California court, and the final verdict on the matter could take months.