A federal judge in San Francisco ruled Thursday that the Pentagon acted illegally when it labeled AI company Anthropic a supply chain risk, finding the designation violated the First Amendment.

CNBC reports that U.S. District Judge Rita Lin found that the Department of Defense punished Anthropic for criticizing the administration publicly, not for an actual security concern. The designation, issued in March 2026, made Anthropic the first American company publicly named a supply chain risk. That label barred defense contractors from using its technology in Pentagon-related work.

The dispute traces back to collapsed negotiations over military…

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