US District Judge Rita Lin said the government's actions "don't really seem to be tailored to the stated national security concern" and questioned whether Anthropic was being punished for bringing public scrutiny to a contracting dispute — conduct she said would be a violation of the First Amendment.
In early March, the Pentagon designated Anthropic as a supply chain risk after contract negotiations broke down over the company's restrictions on using its Claude AI for mass surveillance of US citizens and autonomous weapons systems. The Pentagon wanted access for "all lawful uses" of the technology and said it could not allow a private company to dictate how tools are used during national security emergencies. Anthropic is seeking a preliminary injunction blocking enforcement of the Department of Defense's March 3 supply chain risk designation.
"It looks like an attempt to cripple Anthropic," Lin said.
Government concessions
Government attorney Eric Hamilton said under questioning that a Feb. 27 social media post by Defense Secretary Pete Hegseth carried no legal effect. The post stated that "effective immediately, no contractor, supplier, or partner that does business with the United States military may conduct any commercial activity with Anthropic." However, while the social media post itself was not a formal government action, Hamilton said the supply chain risk designation that Hegseth ordered was.
Anthropic attorney Michael Mongan called Hamilton's comments a significant concession but insufficient given that many people who read Hegseth's social media post may think it was a legal order. "Those concessions are coming on March 24, 25 days after this directive went out," Mongan told the court, noting the post had been read by more than 13 million people. "The average person or employee at a military contractor who looks at the words of this directive is going to read it to say exactly what it says."
Hamilton also conceded that Hegseth's letters to congressional committees did not contain a legally mandated discussion of less intrusive measures considered before the national security supply chain risk designation was issued. Mongan told the court he found no such discussion anywhere in the agency's pre-designation record.
"It appears that the Secretary on February 27 had made this decision, and then you have folks at the agency scrambling around after the fact to try and backfill the procedural requirements — and not even doing that successfully," Mongan said.
The adversary question
Lin pressed the government on whether Anthropic's conduct during contract negotiations could legally constitute a supply chain risk under 10 U.S.C. § 3252, which defines supply chain risk as the threat that an "adversary" may sabotage or subvert a covered system.
Hamilton argued that deteriorating trust during negotiations justified the designation because Anthropic might manipulate future software updates to interfere with military operations.
"I'm just wondering why it is that someone questioning the way things work would lead to suspicion that they might build in a kill switch," Lin said.
Mongan told the court that once Claude is deployed on government systems, Anthropic has no ability to alter its functionality or access — a claim Hamilton did not dispute. The government also conceded it had no evidence Anthropic could update its model on Pentagon systems without the department's consent, though it said an audit was underway.
Industry support
The hearing came after amicus briefs were filed in support of Anthropic from various organizations across ideological lines. Dozens of researchers and engineers at OpenAI LLC and DeepMind Technologies Ltd. filed a brief in their personal capacities, warning that the designation set a dangerous precedent for the US technology sector. Microsoft Corp., which has integrated Anthropic's products into Pentagon-facing services, filed a separate brief arguing the contractor obligation created urgent compliance costs.
Mongan closed by telling the court the requested relief would simply restore the status quo as it existed on the morning of Feb. 27.
"What they can't do is engage in unconstitutional retaliation for our protected speech," he said.
Mongan previously told the court that Anthropic's CFO estimated the designation could reduce 2026 revenue by hundreds of millions to multiple billions of dollars.
Lin said she anticipated issuing an order within days. A Pentagon spokesperson declined to comment. Spokespersons for Anthropic, the Office of Science and Technology Policy and the U.S. Department of Justice did not immediately respond to requests for comment.