US District Judge Rita F Lin ruled on August 27-28, 2026, that the Trump administration's designation of Anthropic as a supply chain risk was unlawful and that the ban on federal agencies using Anthropic's AI technology was inadequately justified [1, 2, 3, 4]. The ruling permanently reversed Defense Secretary Pete Hegseth's supply chain risk label and lifted the federal ban imposed in February 2026 that blocked government agencies, including federal defense customers, from using Anthropic's Claude AI products [1, 2, 3, 4].
Judge Lin described the government's labeling of Anthropic as "arbitrary and capricious" and a violation of due process and the First Amendment [3, 4]. She criticized the government for retaliating against Anthropic due to its public criticisms of the administration. "The government’s words and deeds confirm that the challenged actions were based on a desire to make a public example out of Anthropic for its ‘arrogance’ in criticising the government, not based on any articulable basis to believe that Anthropic would actually sabotage its model," she wrote [1]. She further stated, "The empty invocation of national security is not a blank check to punish and retaliate against government critics" [4].
The original ban blocked Anthropic's technology over concerns the company refused to allow its AI to be used in fully autonomous lethal weapons or for mass surveillance of Americans, which was part of the ongoing dispute [3, 4]. The Pentagon, however, kept pursuing a wind-down of Anthropic AI product use and planned to cease usage by September 30, 2026 [2].
The ruling does not affect a separate Pentagon sanction issued the same day under public procurement regulations, which remains in place pending a separate court decision [4].
Anthropic welcomed the ruling, stating, "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 so all Americans benefit from this technology" [1, 2, 3, 4].
The 59-page ruling marks a decisive judicial check on the Trump-era designation affecting Anthropic since February 2026 and comes just weeks before the Pentagon’s planned full wind-down deadline at the end of September 2026 [2, 4].
