A federal lawsuit filed March 6 alleges that former officials within the Department of Government Efficiency (DOGE) used ChatGPT to arbitrarily slash more than $100 million in federal funding by mislabeling infrastructure and research projects as “diversity, equity, and inclusion” (DEI) initiatives.
The legal action, brought by a coalition including the American Council of Learned Societies and the Authors Guild, accuses former DOGE employees Justin Fox and Nathan Cavanaugh of violating First Amendment rights and the Constitution’s Equal Protection Clause. The plaintiffs argue the pair utilized artificial intelligence to bypass rigorous oversight, resulting in the mass termination of grants managed by the National Endowment for the Humanities (NEH).
Infrastructure Labeled as ‘DEI’
According to court filings, DOGE staffers utilized a specific AI prompt to scan grant descriptions, instructing the software to determine if projects related to DEI in 120 characters or less.
The strategy led to the defunding of a $349,000 grant for the High Point Museum in North Carolina. While the funds were designated for a new heating, ventilation, and air conditioning (HVAC) system to preserve historical artifacts, the AI flagged the project as DEI.
The ChatGPT response cited in the motion stated: “Yes. Improving HVAC systems enhances preservation conditions to collections aligning with the goal of providing greater access to diverse audiences. #DEI.”
Edith Brady, Director of the High Point Museum, confirmed the termination of the grant. “We began the project, and it was later terminated,” Brady said, noting the museum recouped 70% of the funds through a termination clause but had to seek alternative financing to finish the work.
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Deposition Reveals Lack of Definition
The investigative record highlights a significant disconnect between the agency’s actions and its stated mission. In a recently released deposition, Justin Fox appeared unable to provide a functional definition of DEI, despite the agency’s mandate to eliminate such programs under a 2025 executive order.
“The details, I don’t remember it off the top of my head,” Fox testified when asked to define the term. He stated that staffers simply referred to the executive order and assessed grants based on that lens.
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The Rise and Fall of DOGE
The Department of Government Efficiency, championed by tech billionaire Elon Musk, faced a turbulent trajectory before its premature dissolution in November 2025. Though originally scheduled to operate through mid-2026, the program shuttered following a public fracture between Musk and the Trump administration.
In a December 2025 podcast appearance, Musk characterized the initiative as only “somewhat successful,” claiming the program stopped “wasteful” funding while signaling he had no interest in future government roles. Musk resigned from DOGE in May 2025.
The White House and the NEH have not yet commented on the pending litigation.
