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A federal judge handed artificial intelligence company Anthropica significant legal win on Thursday, stopping the Trump administration’s classification of the company as anational security supply-chain riskand governing authorities had violated First Amendment rights through an act of political retaliation.

U.S. District Judge Rita F. Lin from the Northern District of California directed the administration to halt the enforcement of President Donald Trump’s order that prevented federal agencies from utilizing Anthropic’s artificial intelligence technology, and to stop carrying out Defense Secretary Pete Hegseth’s classification of the company as a supply-chain threat, according to a report by the Wall Street Journal. This status had previously been assigned only to foreign adversaries.

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During a hearing on Tuesday, Lin had already indicated her stance, voicing concern that the administration was attempting to“punish” AnthropicAfter the company publicly disclosed information about its contract disagreement with the Pentagon — potentially violating the First Amendment. She described the government’s actions as extreme and stated that it establishes “a pretty low standard” for labeling a company as a supply-chain risk merely because it disagrees with the administration and “raises persistent questions.”

The conflict stems from Anthropic’s decision not to permit its AI models to be utilized in fully autonomous weapons or domestic surveillance systems. Hegseth classified the company as a supply chain threat earlier this month following the breakdown of contract negotiations. Subsequently, Trump ordered all federal agencies to cease collaboration with Anthropic completely.

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Anthropic stated that the administration’s actions, including Hegseth’s social media activity,led to the loss of hundreds of millionsmillions of dollars in cancelled and delayed agreements.

The administration has stated it plans to challenge the decision.