A U.S. judge on Thursday blocked the Pentagon's blacklisting of Anthropic, ​the latest turn in the Claude maker's high-stakes fight with the military over AI safety on the ‌battlefield.

Anthropic's lawsuit in California federal court alleges that Defence Secretary Pete Hegseth overstepped his authority when he designated Anthropic a national security supply-chain risk, a label the government can apply to companies that expose military systems to potential infiltration or sabotage by adversaries.

Hegseth’s unprecedented move, which blocked ​Anthropic from certain military contracts, followed Anthropic's refusal to allow the military to use its Claude AI models ​for U.S. surveillance or autonomous weapons. Anthropic executives have said it could cost the company billions of ⁠dollars in lost business and reputational harm.

U.S. District Judge Rita Lin, an appointee of former Democratic President Joe Biden, ​issued a 59-page order ruling that the Pentagon's decision was "illegal and baseless."

"The empty invocation of national ​security is not a blank check to punish and retaliate against government critics," she wrote.

Anthropic welcomed the ruling and said in a statement that it remained "focused on working productively with the government to harness AI for our national security so all Americans benefit from this technology."

The ​Pentagon did not immediately respond to a request for comment.

Anthropic argues that AI models are not reliable enough to be ​safely used in autonomous weapons and that it opposes domestic surveillance as a violation of rights, but the Pentagon says private companies ‌should not ⁠be able to constrain military action.

The designation made by the Pentagon was the first time a U.S. company has been publicly designated a supply-chain risk under an obscure government-procurement statute aimed at protecting military systems from foreign sabotage.

In its March 9 lawsuit, Anthropic alleged the government violated its right to free speech under the First Amendment of the Constitution by retaliating ​against its views on AI ​safety. The company said ⁠it was not given a chance to dispute the designation, in violation of its Fifth Amendment right to due process.

The lawsuit says the decision was unlawful, unsupported by facts and inconsistent ​with the military's past praise of Claude.

The Justice Department countered that Anthropic's refusal to ​lift the restrictions ⁠could cause uncertainty in the Pentagon over how it could use Claude and risk disabling military systems during operations, according to a court filing.

The government said the designation stemmed from Anthropic's refusal to accept contractual terms, not its views on AI safety.

Anthropic has a second lawsuit pending in Washington, D.C., over a separate Pentagon supply-chain risk designation that could lead to its exclusion from civilian government contracts.