A federal court in San Francisco has ruled that the Pentagon unlawfully classified Anthropic as a supply chain risk. The court found the Department of Defense violated the First Amendment by blacklisting Anthropic in retaliation for the company's public criticism of government AI policy, according to CNBC.

In March, the Department of War classified Anthropic as a supply chain risk after negotiations over military use of Claude AI models fell apart. Anthropic wanted guarantees its technology wouldn't be used for autonomous weapons or mass surveillance, but the Pentagon demanded unrestricted access.

Anthropic filed lawsuits in San Francisco and Washington. The Washington case is still pending, so the company technically remains on the blacklist. The San Francisco ruling still carries weight, especially ahead of Anthropic's planned IPO this fall. The designation could create problems as the government ramps up its use of AI and has shown willingness to act against companies, as it did with its brief ban on Fable.