U.S. District Judge Rita Lin of the Northern District of California handed down a permanent injunction against the Department of Defense late Thursday, closing out a year-long fight over Anthropic’s “supply chain risk” designation. Her 59-page order found the label amounted to unlawful retaliation against the company for publicly criticizing the government’s contracting terms.

Lin wrote the Pentagon’s measures were rooted in a desire to make a public example out of Anthropic for its “arrogance” in pushing back on the administration, rather than any real evidence the firm intended to sabotage its own technology. She added:

“The undisputed ​record shows that ​the challenged actions constituted ⁠unlawful retaliation in ​violation of the ​First Amendment, and that Anthropic was denied the pre-deprivation ​process required under ​the Fifth Amendment.”

Elsewhere in the order, Lin wrote that the empty invocation of national security is not a blank check to punish and retaliate against government critics, language that will likely echo through the company’s other pending case.

The dispute traces back to February 2026, when Defense Secretary Pete Hegseth designated Anthropic a supply chain risk after the company declined to strip safety guardrails that stop its Claude models from being used for mass surveillance or fully autonomous weapons.

The standoff was unusual because Claude had reportedly been the only AI system with access to classified Pentagon systems, and had reportedly been used in the operation that led to Nicolas Maduro’s capture in January 2026.

Days later, Trump escalated the fight in a Truth Social post, warning Anthropic better get its act together or he would use the full power of the presidency to make the company comply, and ordering every federal agency to stop using its technology within a six-month phase-out window.

Thursday’s order is not Anthropic’s first win in this fight as Lin first blocked the Pentagon and 17 other federal agencies from enforcing the designation with a preliminary injunction back in March, restoring the company’s existing federal contracts while the case played out. That earlier order was stayed for seven days to let the administration pursue an emergency appeal to the Ninth Circuit, and the case then moved through May oral arguments before this week’s permanent ruling.

That said, the company still isn’t fully clear, and a narrower Anthropic appeal over separate Pentagon rules is still pending before the U.S. Court of Appeals for the D.C. Circuit.

In a June interview with Axios, Trump said he no longer viewed Anthropic as a threat, telling the outlet “well, not now, but a week ago, maybe,” and crediting the company for behaving responsibly around export controls on its Fable 5 and Mythos 5 models. The blacklist stayed on the books anyway, right up until this week.

An Anthropic spokesperson said the company welcomes the ruling and remains focused on working productively with the government to harness AI for national security so all Americans benefit from the technology.

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