Cybersecurity Policy Report, Administration Ordered to Rescind Anthropic’s Security Threat Designation, (Aug 28, 2026)

By Tom Leithauser

The Trump administration was ordered yesterday to rescind its designation of AI (artificial intelligence) developer Anthropic as a national security threat by a federal judge who ruled that the administration’s attempt to punish Anthropic was illegal.

The administration’s designation of Anthropic as a supply chain threat and its ordering of other federal contractors to end their relationships with the company was a reaction to Anthropic’s objections to the use of its AI models for domestic surveillance or autonomous weaponry, according to the order from the U.S. District Court for the Northern District of California.

The administration told the court that it feared that Anthropic might use its AI models to sabotage federal government systems (CPR, March 19).

But the administrative record justifying those concerns was “slim,” District Judge Rita Lin noted. “A four-page memorandum, which post dates two of the three challenged actions, provides the entirety of the government’s rationale.”

“Defendants have now backed away from the thrust of their risk assessment, which relied on Anthropic having backdoor access to its technology once deployed in a national security system. It is now clear that Anthropic undisputedly lacks any such access and that, as Defendants concede, Anthropic’s technology is itself no riskier to the national security than any other ‘black box’ artificial intelligence model,” she said.

“That leaves only one factor unique to Anthropic on which Defendants rely: ‘trust.’ Defendants claim that because of Anthropic’s ‘increasingly hostile manner through the press’ and its criticism of the Department of War’s views on AI use, Defendants ‘cannot trust Anthropic to ensure the integrity of its models,’” she continued.

“Neither the Constitution nor the federal statute invoked by Defendants allows them to impose sweeping penalties based principally on Anthropic’s critique of the Administration’s views,” Judge Lin asserted.

“The government is certainly owed deference on weighty issues of national security. But Defendants’ contemporaneous words and deeds confirm that the challenged actions were based on a desire to make a public example out of Anthropic for its ‘arrogance’ in criticizing the government, not based on any articulable basis to believe that Anthropic would actually sabotage its model,” she concluded.

The administration’s punishment of Anthropic violated the Administrative Procedure Act and the company’s First and Fifth Amendment rights, the judge ruled (Anthropic PBC v. U.S. Department of War, et al., No. 3:26-cv-01996 (N.D. Cal. Mar. 9, 2026)).

Tech sector organizations expressed relief at the ruling. “We are encouraged by this outcome, as this case matters to anyone doing business with the U.S. government,” Computer & Communications Industry Association (CCIA) President and Chief Executive Officer Matt Schruers said in a statement.

“Designating a company as a supply chain risk is a tool normally reserved for foreign adversaries that must be used with discretion and proper procedure—not as punishment for a difference of views. Allowing the government to unfairly penalize firms without proper process undermines U.S. innovation and competitiveness, especially as American businesses face intense rivalry from overseas AI competitors,” Mr. Schruers said.

“This ruling gives the technology sector the certainty needed to continue offering the most modern, efficient, and secure technologies to the federal government,” TechNet President and CEO Linda Moore said in a statement.

“The court’s decision upholds the rule of law in U.S. public procurement, which is essential for safeguarding America’s status as a world leader in AI innovation by preserving the U.S. government’s longstanding business relationships with the commercial technology sector,” Information Technology Industry Council (ITI) President and CEO Jason Oxman said in a statement.

CCIA, TechNet, and ITI had filed a joint amicus brief in the case (CPR, March 16).

The administration hasn’t indicated whether it would appeal Judge Lin’s ruling. Anthropic filed a separate lawsuit against the administration in the U.S. Court of Appeals for the District of Columbia Circuit, which is pending.

Judge Lin rejected the administration’s request for a seven-day stay of her order. She had already issued a preliminary injunction to protect Anthropic from the administration’s attempt to punish it (CPR, March 27).

The administration provided no evidence that it would suffer irreparable harm absent a seven-day stay, she noted, “even though they have been complying with the Court’s Preliminary Injunction Order for more than five months and had ample opportunity to identify any harms caused by it.”

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