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A U.S. judge just told the Trump administration to back off Anthropic, ruling on Thursday that the Pentagon had no legal ground to label the AI company a supply chain threat and block its tech across federal agencies.
Judge Rita F. Lin in California told the government to stop enforcing the directive against Anthropic and demanded that they file a report by April 6 explaining how they are following her order.
Judge says government punished Anthropic over speech and blocks enforcement
“Punishing Anthropic for bringing public scrutiny to the government’s contracting position is classic illegal First Amendment retaliation. Nothing in the governing 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,” the Judge wrote.
This whole fight started when the Pentagon tagged Anthropic as a supply chain risk, a label that has usually been used for foreign enemies, just because the company said no to using it for mass surveillance as well as war crimes.
The decision also banned agencies from using Claude, which is Anthropic’s main model, and the company challenged that in court through this lawsuit.
Anthropic said the government skipped basic legal process and acted out of disagreement, not security risk.
Rita Lin made her position clear before the ruling. At a hearing in San Francisco on Tuesday, she said the government set a very low bar for calling a company a threat. She said asking tough questions should not lead to punishment.
In the written decision, Rita said the actions did not line up with real national security concerns. She said if the Pentagon had issues with command control, it could just stop using Claude instead of labeling the company a threat. She also said the steps taken looked like punishment aimed at Anthropic.
Court records showed the Defense Department, which called itself the Department of War, based its decision on how Anthropic spoke in the press. Rita said that kind of reasoning breaks free speech protections and called it illegal retaliation.
Anthropic pushes ahead with IPO plans while legal battle with Pentagon continues
Meanwhile, the US government has already said it may appeal the decision, while at the same time, Anthropic is working on a possible stock market listing. The company is looking at an IPO that could happen as soon as October.
Goldman Sachs, JPMorgan, and Morgan Stanley are being looked at for major roles in the deal. The listing could raise more than $60 billion.
The company has already reached a massive valuation. Anthropic was valued at $380 billion after a $30 billion funding round that closed in February. That round was led in part by MGX.
Big tech is tied in as well. Alphabet’s Google, Amazon, Microsoft, and Nvidia all have partnerships with Anthropic. These firms have invested money and provided chips and infrastructure in deals worth tens of billions.
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