Court Tells Pentagon to HODL Off: Anthropic's Claude Ban Gets Rekt

A U.S. federal court in San Francisco has blocked the Trump Administration's crackdown on Anthropic, granting the AI firm temporary relief. Judge Rita Lin issued a preliminary order that halts a Pentagon designation labeling Anthropic a supply chain risk and suspends a directive ordering federal agencies to stop using its AI system, Claude.

The ruling found the government's actions lacked statutory support and appeared harsh rather than grounded in national security concerns. Judge Lin stated no law supports labeling a U.S. company as an adversary based on disagreement with federal policy. She described the measures as "arbitrary" and an abuse of discretion.

The dispute traces back to an agreement between Anthropic and the Pentagon in July 2025, which aimed to make Claude the first AI model approved for classified networks. Negotiations broke down in February after the Pentagon requested unrestricted military use of Claude for all lawful purposes. Anthropic rejected these conditions, claiming its technology should not support lethal autonomous weapons or mass domestic surveillance.

Following the breakdown, the administration escalated actions. On February 27, President Trump ordered federal agencies to stop using Anthropic products, and the Pentagon moved to classify the company as a supply chain risk.

At a March 24 hearing, Judge Lin questioned whether Anthropic faced penalties for publicly criticizing the Pentagon's position. The court concluded the actions resembled First Amendment retaliation.

The ruling also noted that a government-wide ban could damage Anthropic's enterprise AI position. According to Menlo Ventures data, Anthropic held 32% of the enterprise AI