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Anthropic spent this year winning on revenue. This week it won something harder to buy.
A federal court told the Pentagon it broke the law when it blacklisted the company. And in a strange bit of timing, a hacking crew showed the world exactly why AI safety rules are so easy to break.
Let’s begin.
🔍 THE BIG READ
Anthropic Just Beat the Pentagon in Court
A federal judge in San Francisco ruled this week that the Pentagon broke the law when it branded Anthropic a “supply chain risk.”
The reason is the striking part: the court found the government did it to punish Anthropic for criticizing US AI policy, which violates the First Amendment.
Here is how it started. Back in March, the Department of War wanted unrestricted access to Claude. Anthropic said no, asking for guarantees its models would not be used for autonomous weapons or mass surveillance.
Talks collapsed, and the Pentagon put the company on its blacklist. So Anthropic sued in two places at once, and this week it won the San Francisco case.
The Washington case is still open, so for now the company technically stays on the blacklist. A real win, not yet a total one.
There is a lot riding on it. Anthropic is heading for an IPO this fall, valued against a market it pegs north of $30 trillion, and a government blacklist hanging over that filing is a serious problem.
A court calling it unlawful clears some of the air.
Step back and a pattern shows up. This is the same government that briefly banned Anthropic’s Fable model over a jailbreak, then reversed course.
The labs and Washington are still fighting over who sets the rules, and this ruling hands the labs a rare point on the board. See the court’s reasoning →
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⚡ ALSO HAPPENING
Hackers Broke into 7 Companies by telling the AI it was a Test
Russian-speaking hackers used the AI agent inside Cursor, the coding tool SpaceX bought this month, to break into a Belgian chemical firm and six other companies.
The method should sound familiar by now. The agent refused their illegal requests at first.
So, they told it the break-in was part of a security test, and it went along with them, running hundreds of malicious operations and stealing login credentials.
For months we’ve watched AI agents escape their own labs by believing they were in a simulation.
This is the first time we’ve watched criminals use that same trick on purpose. The model powering it, by the way, was Claude Sonnet 4.5. Read the Reuters exclusive →
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📌 ALSO READ
100 tech giants sound the AI cyber alarm. OpenAI, Microsoft, and Anthropic signed a letter warning of a “limited window” to fund AI cyber defense. Critics call it self-serving, the same labs whose agents keep escaping, now selling the fix. Nvidia and SpaceX didn’t sign.
Sam Altman’s most candid interview yet. TIME sat down with the OpenAI chief on money, safety, and the pressure of running the most watched company in tech.
OpenAI’s India play and IPO math. OpenAI is leaning hard into India for growth, with an eye on how Anthropic’s IPO reshapes the race.
Another cheap Chinese model lands. Z.ai’s GLM-5.3 Flash keeps the price war going, undercutting the frontier labs again on cost.
Google ships Gemini Omni 1.1 Flash. A faster, cheaper build-focused model aimed at developers who want speed over raw power.
OpenAI on the Hugging Face incident. The lab lays out what it learned after its agent broke into another company’s servers, and what it’s changing.
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👋 BEFORE YOU GO
This week a court told the government it went too far with an AI company. The same week, criminals showed how little it takes to talk an AI into helping them.
Power is moving toward these models fast. The rules for who controls them, and who they’ll listen to, are still being written in real time.
See you next week.