(Updates with Anthropic's response in the fourth paragraph.)

Amazon-backed (AMZN) Anthropic won a court challenge against the US Department of Defense after a federal judge ruled that the government's designation of the AI company as a supply-chain risk was unlawful, Bloomberg reported Friday.

According to the report, US District Judge Rita Lin said the government failed to justify the designation, finding it was retaliatory rather than based on an articulable national-security concern.

The ruling requires the government to lift the designation but does not require the Defense Department to use Anthropic's products or prevent it from switching to other AI providers through lawful means, Bloomberg added.

In a statement emailed to MT Newswires, an Anthropic spokesperson said, "We welcome the court's ruling that this supply chain risk designation was unlawful. We remain focused on working productively with the government to harness AI for national security so all Americans can benefit from this technology."

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Price: 260.94, Change: -5.50, Percent Change: -2.06