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A federal judge handed artificial intelligence company Anthropic a major legal victory Thursday, halting the Trump administration's designation of the company as a national security supply-chain risk and ruling the government had trampled First Amendment protections in an act of political retribution.

U.S. District Judge Rita F. Lin of the Northern District of California ordered the administration to stop applying President Donald Trump's directive barring federal agencies from using Anthropic's AI technology, and to cease implementing Defense Secretary Pete Hegseth's designation of the company as a supply-chain risk, the Wall Street Journal reported. The status previously was reserved for foreign adversaries.

At a hearing Tuesday, Lin had already signaled where she was headed, expressing alarm that the administration was trying to "punish" Anthropic after the company publicly revealed details of its contracting dispute with the Pentagon — a potential First Amendment violation. She called the government's actions extreme and said it set "a pretty low bar" for designating a company a supply-chain risk simply because it disagrees with the administration and "asks annoying questions."

The dispute traces to Anthropic's refusal to allow its AI models to be used in fully autonomous weapons or domestic surveillance. Hegseth designated the company a supply-chain risk earlier this month after contract renegotiations collapsed. Trump then directed all federal agencies to stop working with Anthropic entirely.

Anthropic said the administration's actions, including Hegseth's social media posts, contributed to the loss of hundreds of millions of dollars in canceled and stalled contracts.

The government has indicated it will appeal.

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