Anthropic has won a preliminary injunction against the Pentagon, but the company’s legal battle may be far from over. Lawyers and lobbyists reportedly believe that this week’s ruling from a California federal judge, which temporarily blocked the Pentagon from declaring the AI startup a risk to national security, does not completely remove risks from the company’s business, as the “supply chain risk“ designation still remains unchanged.US District Judge Rita Lin’s 43-page order found that the Trump administration improperly punished Anthropic by labelling it a “supply chain risk” for restricting the Department of War’s use of its Claude AI model to surveil US citizens or empower autonomous weapons. It’s important to note that this designation has never before applied to an American company. The designation had put at stake Anthropic’s roughly $200 million contract with the Pentagon, partnerships with other federal agencies, and contracts held by third-party contractors using Claude in their government work. Judge Lin noted in her ruling that three contractors either terminated their work with Anthropic or were instructed to do so by the government, and three deals valued at over $180 million fell apart “despite being on the verge of closing.”However, several lawyers and lobbyists said that the court’s decision will do only a little to lift the cloud of uncertainty that has settled on both the company and the broader tech sector, a Politico report claims.
What lawyers and lobbyists said about Anthropic’s recent win over Pentagon
With a parallel case at the DC Circuit Court of Appeals holding the outcome, legal experts and lobbyists say the company’s business risks remain largely unchanged. The Pentagon’s supply chain risk designation against Anthropic was placed under two separate statutes. One of them, which is 41 USC 4713, falls exclusively under the DC Circuit’s jurisdiction. Until that court issues its injunction, the designation remains in force, the report notes.In a statement to Politico, Charlie Bullock, a lawyer and senior research fellow at the Institute for Law and AI think tank, said, “Practically speaking, not that much has changed on the supply chain designation for Anthropic due to this preliminary injunction. I think a lot of the public reaction to this is premature and doesn’t reflect an understanding of the actual situation. I think it’s very possible that they will rule in a different way than Judge Lin did in the Northern District of California. It’s likely, in fact, I would say, that they will rule in a different way.”For the tech industry, the uncertainty extends beyond Anthropic. “As long as the cases and appeals are pending, businesses will not have 100% clarity and certainty regarding the impact of [DOW’s] use of the supply chain designation in this way,” a senior official at a tech trade association told Politico anonymously.Meanwhile, Paul Lekas, head of global public policy at the Software and Information Industry Association, said, “a cloud remains over the business community.”
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Former national security official Saif Khan explained, “After yesterday’s ruling, at least one of the supply chain risk designations is gone. But for Anthropic, from a business perspective, you need both of them gone before it actually helps you. This is really unpredictable. So it’s a frustrating situation for Anthropic.”
