Only one American company has ever been labelled a supply chain risk by the Department of Defense, a designation otherwise reserved for foreign adversaries. That company is Anthropic, marked in early March 2026, and on 27 August a federal judge in California, Rita Lin, ruled the label unlawful retaliation in violation of the First Amendment, and arbitrary and capricious.
The dispute began when Anthropic held two lines in contract talks with the department. It would not let its Claude models be used for mass surveillance of Americans, and it would not allow them to run fully autonomous weapons without human control over targeting and firing decisions. Defence Secretary Pete Hegseth moved to designate the company in late February, and the department notified it by letter. Anthropic sued on 9 March in two separate courts.
Lin wrote that the evidence showed the department wanted to make a public example of Anthropic for its arrogance in criticising government policy. She pointed to a contradiction, noting that Hegseth had separately threatened to invoke the Defense Production Act to compel the company’s cooperation, which implied Anthropic was essential to national security rather than a threat to it. Anthropic said it welcomed the ruling and wanted to work productively with the government.
The designation is not fully lifted. A second Anthropic case, before the D.C. Circuit Court of Appeals, covers a different rule the department used to reach the same label, and no ruling has come. The administration has not said whether it will appeal the California decision. Until both are resolved, a company the government has also called essential stays formally marked as a risk.
