A federal judge in San Francisco granted Anthropic’s request for a preliminary injunction in its lawsuit against the Trump administration. 

Judge Rita Lin issued the ruling on Thursday, two days after lawyers for the artificial intelligence startup and the U.S. government appeared in court for a hearing. Anthropic sued the administration to try to reverse its blacklisting by the Pentagon and President Donald Trump’s directive banning federal agencies from using its Claude models.

Anthropic sought the injunction to pause those actions and prevent further monetary and reputational harm as the case unfolds. The order bars the Trump administration from implementing, applying or enforcing the president’s directive, and hampers the Pentagon’s efforts to designate Anthropic as a threat to U.S. national security. 

“Punishing Anthropic for bringing public scrutiny to the government’s contracting position is classic illegal First Amendment retaliation,” Lin wrote in the order. A final verdict in the case could still be months away. 

During Tuesday’s hearing, Lin pressed the government’s lawyers about why Anthropic was blacklisted. Her language in Thursday’s order was even sharper.

“Nothing in the governing statute supports the Orwellian notion that an American company may be branded a potential adversary and saboteur of the U.S. for expressing disagreement with the government,” she wrote.

Following the ruling, Anthropic said it’s “grateful to the court for moving swiftly.”

“While this case was necessary to protect Anthropic, our customers, and our partners, our focus remains on working productively with the government to ensure all Americans benefit from safe, reliable AI,” the company said in a statement.  

Anthropic’s suit earlier this month followed a dramatic couple weeks in Washington D.C., between the Department of Defense and one of the most valuable private companies in the world.

In a post on X in late February, Defense Secretary Pete Hegseth declared Anthropic a so-called supply chain risk, meaning that use of the company’s technology purportedly threatens U.S. national security. In early March, the DOD officially notified Anthropic about the designation via a letter.

Anthropic is the first American company to publicly be named a supply chain risk, as the designation has historically been reserved for foreign adversaries. The label requires Defense contractors, including Amazon, Microsoft, and Palantir, to certify that they do not use Claude in their work with the military. 

The Trump administration relied on two distinct designations – 10 U.S.C. § 3252 and 41 U.S.C. § 4713 – to justify the action, and they have to be challenged in two separate courts. Because of that, Anthropic has filed another lawsuit for a formal review of the Defense Department’s determination in the U.S. Court of Appeals in Washington. 

Shortly before Hegseth declared Anthropic a supply chain risk, President Donald Trump wrote a Truth Social post ordering federal agencies to “immediately cease” all use of Anthropic’s technology. He said there would be a six-month phase-out period for agencies like the DOD.

“WE will decide the fate of our Country — NOT some out-of-control, Radical Left AI company run by people who have no idea what the real World is all about,” Trump wrote.

The Trump administration’s actions surprised many officials in Washington who had come to admire and rely on Anthropic’s technology. The company was the first to deploy its models across the DOD’s classified networks, and it was championed for its ability to integrate with existing Defense contractors like Palantir. 

Anthropic signed a $200 million contract with the Pentagon in July, but as the company began negotiating Claude’s deployment on the DOD’s GenAI.mil AI platform in September, talks stalled.

The DOD wanted Anthropic to grant the Pentagon unfettered access to its models across all lawful purposes, while Anthropic wanted assurance that its technology would not be used for fully autonomous weapons or domestic mass surveillance. 

The two failed to reach an agreement, and now, the dispute will be settled in court. 

“Everyone, including Anthropic, agrees that the Department of [Defense] is free to stop using Claude and look for a more permissive AI vendor,” Lin said during the hearing Tuesday. “I don’t see that as being what this case is about. I see the question in this case as being a very different one, which is whether the government violated the law.

WATCH: Anthropic vs. Pentagon hearing

The U.S. is preparing to send thousands more troops to the Middle East, prompting speculation about a ground attack on Iran amid conflicting accounts of peace talks.

The Pentagon is reportedly preparing to send about 3,000 troops from the Army’s 82nd Airborne Division to the Middle East, alongside two Marine Expeditionary Units, to assist military operations in Iran. CNBC has contacted the White House and is awaiting a response.

Military experts said that the number of additional troops being deployed to the region appears to be consistent with plans for discrete and time-limited operations — rather than a sustained ground campaign.

It puts two strategic Iranian islands in the spotlight and raises questions about a potential move to seize the Islamic Republic’s nuclear materials.

Retired U.S. Army Lieutenant Colonel Daniel Davis estimated that there were likely only around 4,000 to 5,000 “trigger pullers” or ground troops.

“That is enough to seize a small target for a period of time. You’ve got to understand, even the 82nd Airborne Division, it’s an immediate reaction force to provide very quick reaction on the ground but only in advance of something bigger coming in behind that,” Davis, a senior fellow and military expert at Defense Priorities, told CNBC’s “Squawk Box Asia” on Thursday.

“I have seen no evidence that any kind of a force of size has been even considered, much less alerted, prepared, equipped, trained up that you would need to go … That takes months of time to do.”

Davis said that, from the limited number of ground troops being deployed, there were three possibilities that the U.S. could theoretically execute.

The first possibility is seizing Qeshm Island, which sits “in the horseshoe bend of the Strait of Hormuz,” Davis said.

Qeshm Island, off Iran’s southern coast, is the largest island in the Persian Gulf. Located near the strategically vital Strait of Hormuz, the arrow-shaped island has emerged as a potential U.S. target amid reports that anti-ship missiles, mines, drones and attack craft are being kept there in underground tunnels.

“All enemy movements are under the full surveillance of our armed forces,” Iran’s Speaker of Parliament Mohammad-Bagher Ghalibaf said on X, according to a Google translation.

“If they step out of line, all the vital infrastructure of that regional country will, without restriction, become the target of relentless attacks,” he added.

Ruben Stewart, senior fellow for land warfare at the International Institute for Strategic Studies (IISS) think tank, said the number of U.S. forces preparing to be deployed was not consistent with a sustained ground campaign.

“What is notably absent are the heavy armoured units, logistics depth, and command structures required for a prolonged land war. In practical terms, this is a force that can act quickly and selectively, but not one that could sustain operations deep inside Iran or over an extended period,” Stewart told CNBC by email.

“Seizing Kharg Island is technically feasible but escalatory, given its centrality to Iran’s oil exports. By contrast, securing Iran’s nuclear material would be the least realistic with this force as it would require a far larger, sustained ground presence,” he added.

The relatively limited level of deployment was perhaps best understood as a tool of coercive leverage, Stewart said, as U.S. President Donald Trump’s administration seeks to increase its bargaining power and signal that it has options if diplomacy fails.

The White House has said that Trump has been engaged in “productive” talks with Iran over the last three days, adding that the military operation in Iran was “ahead of schedule.”

Iran, however, has repeatedly denied holding talks with Washington.

The White House hosted its “first humanoid robot guest” on Wednesday, with first lady Melania Trump appearing alongside a robot from robotics upstart Figure AI.

The robot, identified as Figure 3, accompanied the first lady during the second day of the Fostering the Future Together Global Coalition Summit, a gathering focused on technology and children’s education. 

The machine greeted attendees in multiple languages and described itself as “a humanoid built in the United States of America,” according to widely circulated footage from the event.

The display represented one of, if not the, highest-profile showcases of humanoid robotics in the U.S. to date and highlights how the tech is becoming a national priority amid global tech competition. Beijing has also promoted humanoid robots at highly publicized events this year.

The first lady used the robot to promote her push for artificial intelligence in children’s education, suggesting that the robots could one day act as interactive educators at home. However, Figure AI says its third-generation humanoids are also applicable for more general purposes, including commercial and household tasks. 

The White House spotlight is likely to boost the brand of Nvidia-backed Figure AI, a lesser-known robot company compared to larger humanoid players like Tesla‘s Optimus and Boston Dynamics, though some of its team comes from those competitors, as well as tech giants like Apple.

Figure AI was founded in 2022 by Brett Adcock, a tech entrepreneur and billionaire who previously co-founded the publicly traded drone company Archer Aviation and a digital hiring marketplace Vettery. 

Powering its robots is the firm’s in-house Helix AI system, a vision-language-action model that powers its robots and enables learning through observation and verbal commands.

Amid growing investor excitement for physical AI, the firm raised more than $1 billion in its Series C funding round in September led by Parkway Venture Capital with participation from other notable investors such as Nvidia, Intel Capital, Qualcomm Ventures and Salesforce. That gave it a post-money valuation of $39 billion. 

The fundraising is expected to be put towards the firm’s aim to deploy thousands of robots in homes and logistics over the coming years — a goal that has likely been made easier by a major endorsement from the White House. 

Figure AI has already begun work with its first commercial customer in BMW, deploying its robots for tasks like handling sheet metal parts in manufacturing facilities.

It’s possible that Melania’s endorsement of Figure AI’s robots as potential educators will trigger a reexamination of an ongoing lawsuit the company found itself in last year. 

In November, Figure AI was sued by its former head of product safety, who alleged he was fired after warning executives that the company’s robots were powerful enough to fracture a human skull.

Gruendel also alleged that one robot had carved a gash into a steel refrigerator door during a malfunction. Figure AI contends that Gruendel had been fired for poor performance, and described the allegations as “falsehoods.” Figure AI countersued in January, saying Gruendel failed in his role to help the company build a safe robot.

The lawsuit drew attention to broader questions about safety standards in humanoid robotics development and remains pending. 

Interestingly, the White House event on Wednesday wasn’t the first time that a company connected to Adcock received some major shine from the Trump administration. 

Shares of the drone company he co-founded, Archer Aviation, surged in June last year after U.S. President Donald Trump signed an Executive Order directing the establishment of a program to promote the safe integration of electric air taxis in U.S. cities.

Archer is participating in the initiative and is working on projects involving aircraft demonstrations. Following the June 2025 executive order, Archer raised $850 million in a registered direct stock offering. 

He remains a shareholder, according to investment research platform Business Quant, but he has no active executive, board, or advisory position at the company. 

“The Supreme Court, that’s right, of the United States cost our country — all they needed was a sentence — our country hundreds of billions of dollars, and they couldn’t care less,” Trump fumed. “They couldn’t care less.”

Referring to Gorsuch and Barrett, Trump said, “And they sicken me.”

“They sicken me because they’re bad for our country,” Trump added.

Trump’s other appointee to the high court, Justice Brett Kavanaugh, dissented along with two fellow conservatives, Samuel Alito and Clarence Thomas.

The majority, in its decision in the case known as Learning Resources Inc. v. Trump, said on Feb. 20 that a president does not have the authority to unilaterally impose tariffs on imports from most countries under the International Emergency Economic Powers Act, as Trump had claimed.

“Based on two words separated by 16 others in Section 1702(a)(1)(B) of IEEPA —’regulate’ and ‘importation’ — the President asserts the independent power to impose tariffs on imports from any country, of any product, at any rate, for any amount of time,” wrote Chief Justice John Roberts in the majority decision.

“Those words cannot bear such weight,” wrote Roberts, who, like Gorsuch and Barrett, is a conservative.

Since the ruling, the Trump administration has moved to replace the revenue the U.S. government would have collected if the IEEPA tariffs had been upheld.

Trump, on Feb. 20, invoked Section 122 of the Trade Act to impose global tariffs of 10% on imports, but those duties last for just 150 days unless Congress approves an extension.

Earlier this month, the office of U.S. Trade Representative Jamieson Greer opened trade investigations into nearly 80 countries and economies under Section 301 of the Trade Act of 1974, including China, Japan, India, Mexico, and the European Union.

Section 301 allows the U.S. to impose tariffs on imports from nations found to have engaged in unfair trade practices.

President Donald Trump said he’s considering sending the National Guard to U.S. airports, two days after the administration sent Immigration and Customs Enforcement agents to several major U.S. airports following hourslong waits for travelers because of the partial government shutdown.

In a Truth Social post on Wednesday, Trump blamed Democrats for the shutdown, which began Feb. 14.

“Thank you to our great ICE Patriots for helping. It makes a big difference,” he wrote in his post. “I may call up the National Guard for more help.”

More than 11% of TSA officers called out on Wednesday and more than 450 have quit since the shutdown started, the Department of Homeland Security said.

Elevated absences of Transportation Security Administration officers, who are required to work though they’re not getting paid during the shutdown, have contributed to long lines at major U.S. airports, including in Atlanta, Houston and New York.

DHS, which oversees both ICE and and TSA, said the ICE agents will “support airports facing the greatest strain” but the department didn’t respond to requests for comment on what the ICE agents’ duties are. ICE agents are getting paid in the shutdown.

Airlines have been warning customers about potentially long security lines, while executives grow increasingly frustrated with lawmakers about the impasse. On Tuesday, Delta Air Lines said it suspended its airport escorts and other special services for members of Congress and their staff because of the ongoing partial shutdown of the DHS.

The shutdown comes as Democrats in Congress have demanded changes to how federal immigration enforcement operates in exchange for releasing DHS funding after two U.S. citizens were shot and killed by ICE officers in Minneapolis.

Deteriorating asset quality, collateral markdowns and a growing rush for the exits are rattling private credit markets and prompting comparisons to the Global Financial Crisis.

But a spike in loan defaults, while painful, could help shake out pockets of stress from the $3 trillion sector and provide what one industry pro calls a “healthy reset” after its first major liquidity test.

Ares Management on Tuesday opted to curb investor withdrawals from its $10.7 billion private credit fund, just a day after Apollo Global Management unveiled similar measures in one of its vehicles. Ares has capped redemptions in its Ares Strategic Income Fund at 5%, after withdrawal requests surged to 11.6%, according to a Bloomberg report.

Other managers, including Blue Owl Capital and Cliffwater, have also scrambled to halt or restrict withdrawals in recent weeks, as rising default fears spark an investor retreat from the sector.

Comparisons to the build-up to the 2008 Global Financial Crisis are now intensifying as concerns over underlying loan quality grow.

Morgan Stanley recently warned default rates in private credit direct lending could surge to 8%, well above the 2-2.5% historical average, with pressure concentrated in sectors vulnerable to AI disruption, such as software.

However, Morgan Stanley analysts led by strategist Joyce Jiang also said an 8% default spike would be “significant but not systemic,” pointing to lower leverage among private credit funds and business development companies compared with 2008.

So what would a default spike of that magnitude look like in practical terms?

“An 8% default rate takes private credit from a ‘zero loss’ fantasy to a more normal credit asset class — painful in spots, but ultimately a healthy reset that frees up capital for stronger businesses,” said Sunaina Sinha Haldea, global head of private capital advisory at Raymond James.

She said a normalization from ultra‑low defaults would be “painful for some funds” but “healthy for the asset class if it forces better underwriting and more realistic valuations.”

An 8% or 9% default rate would largely manifest through so-called “shadow defaults,” such as maturity extensions and covenant waivers, said William Barrett, managing partner at Reach Capital. Lenders use these “amend-and-pretend” tools to keep borrowers afloat and avoid immediate bankruptcy.

While payment-in-kind agreements delay cash returns, increase debt, and potentially signal greater stress in the system, they also act as an effective “release valve” that stabilizes companies and prevents outright failures, he added.

“For the real economy, this means capital becomes trapped in restructurings, leading to tighter future lending conditions,” Barrett told CNBC via email.

Concerns over credit quality have spread through private markets following the high-profile collapses of First Brands and Tricolor within the U.S. auto parts sector last year. While those failures were tied to asset-based finance and bank-syndicated debt, rather than traditional middle-market direct lending, they thrust the broader question of risky debt in private markets into the spotlight.

Federal Reserve Chair Jerome Powell last week pushed back when asked whether stagflation posed a threat to the U.S. economy. His successor may face a tougher challenge, as Wall Street forecasters raise their expectations of recession, brought on in part by the Iran war and potential for higher prices.

In recent days, economists have pulled up their risk assessments of a U.S. contraction amid heightened uncertainty over geopolitical risk and a labor market that for the past year has shown strains over the past year.

Moody’s Analytics’ model has raised its recession outlook for the next 12 months to 48.6%. Goldman Sachs boosted its estimate to 30%. Wilmington Trust has the odds at 45%, while EY Parthenon has it at 40%, with the caveat that “those odds could rapidly rise in the event of a more prolonged or severe Middle East conflict.”

In normal times, the risk for a recession in any given 12-months span is around 20%. So while the current predictions are hardly certainties, they signify elevated risk.

The situation poses a tough challenge for policymakers who are being asked to balance threats to the labor market against sticky inflation.

“I’m concerned recession risks are uncomfortably high and on the rise,” said Mark Zandi, chief economist at Moody’s Analytics. “Recession is a real threat here.”

Talk of an economic contraction has accelerated as the war with Iran has dragged on.

An oil shock has preceded virtually every recession the U.S. has seen since the Great Depression, save for the Covid pandemic. Prices at the pump have risen by $1.02 a gallon over the past month, an increase of 35%, according to AAA.

While economists still debate the pass-through impact from higher energy, the trend has held.

“The negative consequences of higher oil prices happen first and fast,” Zandi said. “If oil prices stay kind of where they are through Memorial Day, certainly through the end of the second quarter, that’ll push us into recession.”

Like his fellow forecasters, Zandi said his “baseline” expectation is that the warring sides find a diplomatic off-ramp, oil flows again through the Strait of Hormuz and the economy can avoid a worst-case scenario.

To be sure, economists as a lot are negative and subject to the old trope about predicting nine of the last five recessions. Markets also have been wrong about where the economy is headed. A portion of the yield curve — or the spread between various Treasury maturities — most closely watched by the Fed has sent repeated false recession signals for much of the past 3½ years.

But the threat of a prolonged war, pressure on a consumer who drives more than two-thirds of all growth, and a labor market that created virtually no jobs in 2025 collectively raises the risk that the expansion could falter.

“That path through is increasingly narrow, and it’s getting increasingly difficult to see the other side,” Zandi said.

Consumers also are pessimistic. Consumer site NerdWallet said its March survey showed 65% of respondents expect a recession in the next 12 months, up 6 percentage points from the month before.

Beyond energy prices, economists say the labor market is a key pressure point.

The U.S. economy created just 116,000 jobs for all of 2025 and lost 92,000 in February. While the unemployment rate has held steady at 4.4%, that’s largely been because of a dearth of firing rather than a burst in hiring.

Indeed, stocks have had a rough ride during the war. The Dow Jones Industrial Average has fallen more than 5% during the hostilities — important because consumer spending and sentiment have been supported by higher-income households benefiting most from rising equity prices.

Gross domestic product is on track to grow at a 2% pace in the first quarter, according to the Atlanta Fed’s GDPNow tracker of rolling data. However, that’s coming off an increase of just 0.7% in the fourth quarter, the product in part of the government shutdown. Economists had expected that the drain on growth in Q4 would translate to a boost in Q1, but the effects of that appear to be modest.

Still, if global leaders can find an end to the war soon, the economy again is expected to skirt the gloomiest predictions. Stimulus from the One Big Beautiful Bill in 2025 is projected to goose growth, with lower regulations and a boost in tax returns that could help consumers cope with elevated prices. A sustained rise in production also is a factor in the economy’s favor.

“There is support underneath,” said North, the Allianz economist. “That makes me real hesitant to use the ‘R’ word. But certainly, I think we’re seeing a slowdown this year.”