I don't agree that the government should be able to do what they're doing regarding the company, but I don't understand how it's a violation of free speech.
It seems they're trying to clarify that AI projects are a creative project used for expression of motion. And that seems like a stretch to me? I don't know, I don't fully understand it.
Like I agree that they were within their rights to refuse to do business with the US government, and I don't agree that the response to them refusing it should be the US government blacklist their company for contracts. But I don't see how those factors make it a violation of the First Amendment.