“Defendants’ designation of Anthropic as a ‘supply chain risk’ is potentially contrary to law and arbitrary and capricious,” Lynn wrote in justifying the temporary relief. “Anthropic’s apparent insistence on War Department use restrictions provides no legitimate basis for inferring that it might become a saboteur.”
Anthropic and the Pentagon did not immediately respond to requests for comment on the decision.
The Defense Department, which calls itself the War Department under Trump, has relied on Anthropic’s cloud AI tools over the past few years to write sensitive documents and analyze classified data. But this month, after determining that Anthropic couldn’t be trusted, it began reining in the cloud. Pentagon officials cited several instances in which Anthropic allegedly imposed or sought to impose use restrictions on its technology, which the Trump administration found unnecessary.
The administration ultimately issued a number of directives, including designating the company as a supply-chain risk, the effect of which gradually resulted in curbing the use of cloud in the federal government and damaging Anthropic’s sales and public reputation. The company filed two lawsuits challenging the restrictions as unconstitutional. At a hearing on Tuesday, Lin said the government appeared to illegally “cripple” and “punish” Anthropic.
Lynn’s decision on Thursday “restores the status quo” until Feb. 27 before the directive was issued. “This does not prevent any defendant from taking any legal action on the date that would have been available to him,” he wrote. “For example, this order does not require the War Department to use Anthropic’s products or services and does not prevent the War Department from transferring to other artificial intelligence providers, so long as those actions are consistent with applicable regulations, statutes, and constitutional provisions.”
The decision shows that the Pentagon and other federal agencies are still free to cancel deals with Anthropic and are asking contractors who integrate the cloud into their equipment to stop doing so, but without citing the supply-chain-risk designation as a basis.
The immediate impact is not clear as Lynn’s order will not take effect for a week. And a federal appeals court in Washington, DC, has yet to rule on a second lawsuit filed by Anthropic, which focuses on a separate law under which the company was also barred from providing software to the military.
But Anthropic could use the Lynn decision to demonstrate to some customers worried about working with industry behemoths that the law may be on its side in the long run. Lynn has not set a schedule for making a final decision.
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