Court rules Pentagon ban of Anthropic unlawful

On August 28, 2026, U.S. federal judge Rita Lin ruled that sanctions imposed by the Trump administration against AI company Anthropic were illegal. The sanctions, enacted in February, included an executive order barring federal agencies from using Anthropic's tools and a 'supply chain risk' designation by Defense Secretary Pete Hegseth, a status previously reserved for foreign firms. The judge found the actions were retaliation for Anthropic's public criticism of the Pentagon and its refusal to allow its Claude AI models to be used for fully autonomous lethal weapons or mass surveillance of Americans. The ruling permanently blocks enforcement of the order and overturns the designation, taking effect immediately, though the government may appeal. Anthropic had argued the designation could cost billions in lost business and reputational harm. The court also noted the designation was the first time a U.S. company was publicly designated under the obscure procurement statute. Anthropic has a separate pending lawsuit in Washington D.C. over a similar designation affecting civilian contracts.