Lawsuit Claims Federal Agency Used ChatGPT to Cancel Humanities Grants

A federal lawsuit has brought to light allegations that a government initiative established by the Trump administration employed generative AI to scrutinize and cancel federal grants. The legal action, brought forward by the American Council of Learned Societies and the American Historical Association, claims that the Department of Government Efficiency (DOGE) relied on ChatGPT to determine if funding proposals were related to diversity, equity, and inclusion (DEI) programs.

According to the lawsuit, this AI-driven process resulted in the cancellation of grants that had already been awarded. A specific case involves the High Point Museum in North Carolina, which had secured a $349,000 grant from the National Endowment for the Humanities (NEH) to replace an outdated climate-control system. The funding was cut after DOGE staff used the chatbot to review the proposal. The AI reportedly concluded that the project related to DEI because improved artifact preservation would allow for greater access by diverse audiences.

AI Replaces Expert Review

DOGE, created via executive order in January 2025, was tasked with auditing federal spending across various agencies. In a deposition included in the court filings, DOGE staffer Justin Fox admitted that employees utilized ChatGPT to analyze grant descriptions. The chatbot's responses and explanations were logged in a spreadsheet, which ultimately replaced a list previously curated by NEH staff to identify potential cuts.

Attorneys for the academic groups argue that this methodology replaced established expert review with a hurried, automated system. Beyond the museum infrastructure project, the spreadsheet also flagged a proposal from North Carolina Central University—a historically Black institution—intended to develop teaching materials using digital archives.

Response and Implications

Museum Director Edith Brady confirmed that the institution had already commenced work on the HVAC project before the termination, though they managed to recover roughly 70 percent of the award through a termination clause. Critics of the administration's approach, including Modern Language Association executive director Paula Krebs, argue that the facts reveal a disregard for the democratic process and the core mission of the NEH. The lawsuit contends that the cancellations were unlawful and violated the First Amendment.