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WASHINGTON — The Trump administration defended the Pentagon’s decision to blacklist artificial intelligence firm Anthropic in federal court, arguing the move is lawful and rooted in national security concerns, March 17, 2026. The case centers on whether the government can restrict business with a company over its AI safeguards and whether such action violates constitutional protections.
In a legal filing, the U.S. government said the Pentagon designated Anthropic a “national security supply chain risk” on March 3 after the company refused to remove restrictions on how its AI systems could be used. Officials argued the dispute concerns corporate conduct rather than protected speech.
“It was only when Anthropic refused to release the restrictions on the use of its products — which refusal is conduct, not protected speech — that the President directed all federal agencies to terminate their business relationships with Anthropic,” the Department of Justice wrote in its filing. The government added that “no one has purported to restrict Anthropic’s expressive activity.”
Anthropic has challenged the designation in federal court in California, seeking to block the Pentagon’s action while litigation proceeds. The company described the government’s move as “unprecedented and unlawful,” alleging violations of free speech and due process and arguing officials failed to follow required procedures.
“Seeking judicial review does not change our longstanding commitment to harnessing AI to protect our national security, but this is a necessary step to protect our business, our customers, and our partners,” the company said in a statement.
The dispute follows failed negotiations between Anthropic and defense officials over the company’s refusal to allow its AI systems to be used for autonomous weapons or domestic surveillance. U.S. officials contend such restrictions could limit military capabilities and potentially endanger lives, while Anthropic maintains current AI technology is not safe for those applications and opposes their use on principle.
The blacklisting currently applies to a limited set of military contracts but could expand. A separate designation under federal supply chain security law may allow broader restrictions across the government, raising concerns about reputational damage and projected financial losses for the company in 2026.
Legal experts say the case could test the boundaries of government authority over private-sector AI development, particularly whether officials can penalize companies for imposing ethical limits on their technology.
The legal fight spans multiple courts, including the California case and a separate challenge in a Washington appeals court over the broader designation. At its core, the dispute highlights a growing tension between national security priorities and corporate control over emerging technologies.