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Federal judge rules for Anthropic in Pentagon dispute, nullifies government supply chain risk designation
The Trump Administration’s decision to punish Anthropic for its stance forbidding Claude’s use in domestic surveillance and autonomous weapons by identifying it as a supply chain risk to national security was “arbitrary and capricious,” a federal judge ruled on Thursday.
US District Court Judge Rita Lin said federal authorities had no legitimate reason to tell companies with government contracts that they couldn’t work with Anthropic.
“The undisputed record shows that the challenged actions constituted unlawful retaliation in violation of the First Amendment and that Anthropic was denied the pre-deprivation process required under the Fifth Amendment,” Lin said in her ruling, calling the designation “arbitrary and capricious.”
She stressed that the government action seemed punitive, and was not based on legal and national security risks.
The government’s words and deeds “confirm that the challenged actions were based on a desire to make a public example out of Anthropic for its ‘arrogance’ in criticizing the government, not based on any articulable basis to believe that Anthropic would actually sabotage its model,” Lin wrote.
She pointed out, “a few days before the challenged actions began, Secretary Hegseth proposed applying the Defense Production Act to Anthropic, which would mean the company was essential to national security rather than a threat to it. Even now, the government is discussing collaboration with Anthropic on its new model, Mythos, in an array of sensitive contexts. None of that is consistent with a genuine fear that Anthropic is a saboteur [that] would poison its software to harm national security.”
The judge added that the stated government fears made no sense, noting that the usage policy applicable to Pentagon work is a purely contractual limit. “Anthropic is incapable of enforcing it technologically, and does not have direct visibility into how DoW [Department of War] uses its model,” she pointed out.
“Nothing in the Administrative Record describes, even at a high level, what technological means would give rise to the so-called ‘backdoors’ or could otherwise allow Anthropic to ‘disable’ or affect Claude during a DoW operation,” the judge wrote. “Anthropic has submitted unrebutted evidence that it lacks any technological means to access or control deployed models.”
Lawyers, consultants, and analysts who looked at the decision were confident that the case would be appealed, and that it will end up in the US Supreme Court.
Alan Webber, program VP for national security, defense, and intelligence at IDC, said that Lin’s ruling “was that the label [supply chain risk] was retaliation for Anthropic refusing to loosen safety guardrails DoD [Department of Defense, aka the Department of War] wanted lifted, dressed up in national security language. Put another way, a government customer tried to use a supply chain risk designation as leverage in a contract dispute over model behavior and application, and not because of an actual vulnerability.”
Implications for CIOsWebber said the implications for CIO strategy are concerning.
“If a government CIO is relying on a vendor’s contractual guardrails, this case says those commitments can potentially become the trigger for exactly the kind of blacklisting that risk registers are supposed to protect against,” Webber said, noting that anyone who paused Claude usage or froze a subcontract because of the DoD mandate has a legal basis to resume the initiatives. “But obviously that doesn’t mean they will, or even should, as this will be appealed.”
He added that competing AI vendors have been using the government action as a sales tool, and with this ruling, the argument that Anthropic is a designated supply chain risk ”just got weaker, which could lead to contract award disputes.”
Consultant Brian Levine, executive director of FormerGov, recommended that CIOs do what they should have always done: Evaluate all products based solely on their merits.
“CIOs should focus on using the frontier models that they believe make the most sense for their business, considering factors such as effectiveness, cost, security, safety, and confidentiality,” he said. “Anthropic and the other large frontier models each have too much market share to make retaliation for their use realistic, and the administration seems to have already moved on from this particular battle.”
Justin Greis, CEO of consulting firm Acceligence, agreed that this case has profound implications for CIOs and their AI decisions.
What the federal judge did was reject the leap from a commercial and policy disagreement to an expansive supply chain risk designation without a sufficiently grounded technical rationale or process, Greis pointed out.
“The court found that Anthropic did not have the ability to access, alter, or shut down models once deployed in the government environment, and that the government ultimately conceded Anthropic’s technology was not inherently riskier than other comparable black box AI models,” he said.
“I think that distinction matters enormously for CIOs and CISOs,” he stressed. “As AI becomes part of the operating fabric of an enterprise, ‘We don’t trust the vendor’ cannot become a substitute for a defined risk model. Organizations need to be able to articulate what the actual technical risk is, how it manifests, what controls exist, and whether the response is proportional to that risk.”
“That becomes particularly important with AI,” he added, “because people can easily conflate disagreements over model behavior, usage policies, ethics, contractual restrictions, and cybersecurity into one amorphous category called ‘AI risk.’”
Original government edict still problematicMark Rasch, a former federal prosecutor who is now general counsel at Unit221B, a threat intel and security consulting company, said he was surprised by how quickly government attorneys surrendered on this case.
“One of the things that struck me is that the government appears to have abandoned any rationale it might have had for its decision about Anthropic,” he said. The government “came back with all these reasons, but then they abandoned them all when they had to prove them.”
But, he said, the government instruction to all government contractors to also shun Anthropic was problematic.
“It’s one thing for the government to say ‘We’re not going to do business with you.’ It’s quite another thing to say ‘Nobody we do business with can do business with you either,’” Rasch said. “This says that if you are disfavored by the administration, they’re not just going to blacklist you and say they won’t do business with you. They’re going to say that nobody can do business with you.”
Supreme Court arguments will likely be very differentRasch predicted that the legal arguments in the Supreme Court will be quite different, and will potentially sidestep the lack of evidence.
“In the Supreme Court, [the government’s] biggest argument will not be that ‘We are right that it is a supply chain risk,’ but that, ‘Whether we’re right or wrong is irrelevant. We get to make that [supply chain risk designation] decision, not the court.’”
That would mean that the Supreme Court Justices could avoid exploring whether the government made the right decision, and instead focus on whether the government has the unlimited right to decide who is a national security risk.
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Anthropic’s new framework will let AI agents control hardware
Anthropic on Thursday launched the Model Hardware Standard, a new framework designed to enable the control of hardware using AI agents. With the new framework, AI agents will, for example, be able to operate robots or microscopess.
The Model Hardware Standard could also be useful for developing new drugs or calibrating the laser in a quantum computer, according to Reuters.
The company’s plan is to eventually release the new framework as open source, after it undergoes thorough testing.
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Are We on the Verge of an Intelligence Explosion? Maybe Not.
Recursive self-improvement, where AI continuously builds better versions of itself, might be harder than some hope.
There’s growing excitement in the AI industry about the idea that today’s leading models could build the next generation of the technology. But a new study recently found top AI agents struggle on the kind of genuinely open-ended research problems required to push the field forward.
Large language models have made rapid progress in many of the day-to-day jobs involved in machine learning research, such as writing code, generating and curating data, and running experiments. Last year, startup Sakana AI’s AI Scientist-v2 even managed to write a paper that cleared peer review for the prestigious International Conference on Learning Representations.
These advances have led to speculation that models are close to being able to build better versions of themselves with little human oversight—a process called recursive self-improvement. The idea underpins predictions that we may be on the verge of an intelligence explosion that could quickly lead to AI superintelligence.
In a recent paper, researchers put the idea to the test using a new approach they call shadow evaluations. This involves taking the research question from a high-quality, unpublished machine learning paper and asking AI agents to solve the problem. The original paper’s authors then grade the results. When the team tested Claude Opus 4.8 on two papers submitted to the prestigious machine-learning conference NeurIPS 2026, the authors rejected both.
“The papers were nowhere close to the mark when it came to being at the quality of a top AI conference,” Sayash Kapoor from Princton University, who co-led the study, told MIT Technology Review.
Previous efforts to get AI agents to do machine learning research have often targeted problems focused on engineering, such as reproducing previous research or training smaller models against a benchmark.
In the new experiments, the researchers challenged models with more open-ended tasks that required them to devise hypotheses, decide what evidence is needed to validate them, judge when a research direction was fruitless, and go back to the drawing board.
One research question was whether the personality traits a language model displays can be measured and adjusted by observing and editing its weights; the other attempted to detect when a model that works with tabular data has quietly stopped being reliable.
In each case, the AI researchers were given $3,000 of API credits, a budget for time on GPUs to run machine learning experiments, a dedicated Linux virtual machine, and unrestricted internet access. They were then given six days to produce a paper that could pass NeurIPS’ stringent peer-review criteria.
In both cases, the models got a good start. The agents surveyed the literature effectively, came up with opening hypotheses that mirrored those of the authors, and successfully ran hundreds of experiments.
But they quickly went off the rails. Although they could monitor their own use of time and their API and GPU budgets, they rushed through the process. One left 110 hours of unused time on the clock, and both failed to spend even 50 percent of their API budget.
Both agents also settled on a research direction within just 10 hours and failed to change approaches despite repeated negative feedback from another AI designed to review drafts of their papers. The reviewer identified problems the human authors would also flag in the final paper, but the models simply added caveats to their findings and ploughed on. Ultimately the papers received a “strong reject” and a “reject” decision from the human reviewers based on NeurIPS grading protocol.
The authors admit their approach has limitations. The reviewers knew AI had written the submissions, and some of the team are on record as doubting an imminent intelligence explosion. The original human-authored papers also took far longer than six days to produce and used many more GPU hours to reach their conclusions (though, as the researchers note, the models did not use their allocated budget in any case).
Nonetheless, the results suggest that today’s models still have some way to go before they can tackle the most challenging problems in machine learning research. Until that happens, the dream of recursive self-improvement is likely to remain a distant prospect.
The post Are We on the Verge of an Intelligence Explosion? Maybe Not. appeared first on SingularityHub.
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