A judge has ruled the US Department of Defense acted unlawfully when it designated artificial intelligence (AI) startup Anthropic a supply chain risk, calling the move “illegal and baseless”.

The Claude-maker argued in the lawsuit that Defense Secretary Pete Hegeth overstepped his authority with the new designation. It followed Anthropic’s refusal to allow the military to use its AI models for things that included surveillance or autonomous weapons.

US district judge Rita Lin said in the ruling that citing national security “is not a blank check to punish and retaliate against government critics”.

The BBC has contacted the Pentagon, White House and Anthropic for comment.

Anthropic’s lawsuit called the government’s actions both “unprecedented and unlawful”. The designation calling them a supply-chain risk cited a law aimed at protecting military systems from foreign sabotage.

It marked the first time an American company had been publicly designated as such.

The Claude-maker said its models were not reliable enough to be safely used in weapons systems for the military. It added that it opposed its use for domestic surveillance as a violation of rights.

The Pentagon said at the time that private companies should not be able to constrain military action.

The White House had previously said Anthropic was “a radical left, woke company” attempting to control military activity” and argued the military was beholden to the US Constitution, “not any woke AI company’s terms of service”.

Anthropic’s executives estimated that the move could cost the company billions of dollars in lost business and reputational harm.