A US federal judge ruled Thursday that the Trump administration acted illegally when it designated artificial intelligence (AI) company Anthropic a national security risk and barred it from government work.

US District Judge Rita Lin in California ruled that the government unlawfully retaliated against Anthropic over its public positions on how its AI technology should be used.

“The empty invocation of national security is not a blank check to punish and retaliate against government critics,” Lin wrote.

Anthropic welcomed the decision, saying the court found the supply chain risk designation unlawful.

The dispute began over a $200- million Pentagon contract involving AI technology for classified systems. Anthropic sought restrictions preventing its technology from being used for mass surveillance of Americans or autonomous lethal weapons, while the Pentagon argued that a private company could not dictate government policy.

Defense Secretary Pete Hegseth later designated Anthropic a “supply chain risk,” effectively preventing military contractors and suppliers from doing business with the company.

Anthropic challenged the designation, arguing that it was politically motivated, violated its First Amendment rights and improperly applied statutes intended for national security supply chain threats.

A separate Anthropic lawsuit remains pending before a federal appeals court in Washington. The Trump administration could also appeal Lin’s ruling.