Winners & losers: The US government is being sued by an AI startup for halting access to Anthropic's Fable 5 model, which was available for only three days this month. Legion says that every day it goes without access to Claude Fable 5, the company's ability to survive is being eroded.
Legion filed the lawsuit in Washington, D.C., federal court, challenging a June 12 directive from the Commerce Department's Bureau of Industry and Security.
The order required Anthropic to block any foreign national, inside or outside the United States, from using Fable 5 and Mythos 5. Anthropic responded by turning off access to the models for everyone while it worked out how to comply.
That was a problem for Legion, a San Jose-based legal tech startup that builds AI tools for lawyers.
The company says its software can draft pleadings, discovery requests, motions, and other court documents. It also employs Canadian nationals who work remotely from Canada, meaning parts of its development team were cut off even after Anthropic restored Fable 5 with nationality-based access controls and extra compliance screening.
According to Reuters, Legion claims it depends on Anthropic's tools for its platform and wants a judge to vacate the directive. It also plans to seek a preliminary order blocking the government from enforcing it.
"The harm to Legion is immediate, irreparable, and existential," the complaint states. "The pace of frontier AI advancement is blistering, and competitive ground lost during a suspension cannot be regained after the fact."
Fable 5 was Anthropic's attempt to offer a public version of its more restricted Mythos-class technology. Mythos 5 remained limited to a small group of cyberdefenders, infrastructure providers, and select researchers, while Fable 5 used the same underlying model with heavy safeguards.
Those safeguards were designed to refuse or redirect risky cybersecurity, biology, and chemistry requests, sometimes routing users to the older Claude Opus 4.8 model instead.
The government's concern reportedly centered on claims that Fable 5 could be jailbroken, allowing users to bypass some restrictions. Anthropic said it reviewed the technique and believed the demonstrated vulnerabilities were minor, already known, and discoverable by other public models.
Anthropic is not a defendant in Legion's lawsuit. The Commerce Department and White House did not respond to Reuters' requests for comment.