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An anthology about Jewish writers and the Holocaust was among the grants ChatGPT flagged as DEI during the review Source: DOT Miners

A federal judge has permanently blocked the Trump administration from cancelling more than $100 million (£73.7 million) in humanities grants after two former Department of Government Efficiency staffers admitted they used ChatGPT to scan the funding for keywords like 'DEI,' 'LGBTQ,' and 'equity' and flagged them for termination.

US District Judge Colleen McMahon in Manhattan ruled on Thursday that the cancellation of more than 1,400 National Endowment for the Humanities grants violated the First Amendment, the Fifth Amendment's equal protection guarantee, and exceeded DOGE's statutory authority. McMahon called the process 'a textbook example of unconstitutional viewpoint discrimination.'

The 143-page ruling came after the Authors Guild, the American Council of Learned Societies, the American Historical Association, and the Modern Language Association sued DOGE and the NEH over the cuts.

ChatGPT Was the Government's 'Chosen Instrument'

McMahon rejected the government's argument that ChatGPT, not officials, made the decisions about which grants to cut. 'ChatGPT was the Government's chosen instrument for purposes of this project,' she wrote, adding that its use 'neither excuses presumptively unconstitutional conduct nor gives the Government carte blanche to engage in it.'

Court records showed that DOGE staffer Justin Fox ran hundreds of grant descriptions through ChatGPT with the prompt 'Does the following relate at all to DEI?' Fox testified that he didn't define what 'DEI' meant for the system and didn't know how the model interpreted the term. The AI flagged projects simply because their descriptions mentioned race, religion, gender, or sexuality.

Staffers Had No Experience in the Humanities

Fox and fellow DOGE staffer Nathan Cavanaugh controlled the entire process of selecting grants for termination. Neither had any relevant background in the humanities, public or private grant administration, peer review, or government service of any kind. Fox previously worked at investment firm Nexus Capital Management. Cavanaugh, a political appointee in his late 20s, had co-founded tech startups before joining the administration.

They didn't consult scholars, review the grants themselves, or use the NEH's peer review system. Cavanaugh testified that they pressured NEH acting chairman Michael McDonald to 'move faster,' citing White House demands to speed up the terminations.

A Holocaust Anthology Got Flagged as DEI

Among the grants ChatGPT flagged was an anthology titled 'In the Shadow of the Holocaust,' a collection of short fiction by Jewish writers from the Soviet Union. The AI classified it as DEI because it explored 'Jewish writers' engagement with the Holocaust in the USSR.' McDonald testified he didn't believe the grant was DEI-related or wasteful. DOGE overruled him and cancelled it anyway.

McMahon called the decision 'deeply troubling,' writing that 'at a time when the spectre of antisemitism has reemerged from the shadows, for our Government to deem a project about Jewish women disfavoured because it centred on Jewish cultures and female voices' demanded the court's attention.

A Precedent for AI in Government Decisions

The grants funded scholars, writers, museums, libraries, and research organisations, and were cancelled in April 2025 after Trump issued executive orders targeting diversity, equity, and inclusion programmes and empowering DOGE to slash federal spending. The NEH has awarded more than $6 billion (£4.4 billion) in grants since its founding in 1965, and its budget accounts for roughly 0.003% of total federal spending.

McMahon wrote that while a new administration may pursue its own funding priorities, 'it has no license to suppress disfavoured ideas.' According to reports, the White House and the Department of Justice didn't respond to requests for comment on Thursday evening. It wasn't immediately clear whether an appeal was planned.

The ruling raises a question that won't go away any time soon. As government agencies turn to AI for everything from benefits processing to regulatory enforcement, McMahon's decision draws a legal line around how much human oversight is required when artificial intelligence helps shape spending decisions that affect millions of lives.

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