ChatGPT Flagged an HVAC Grant as DEI, Helping DOGE Cut $100 Million From NEH

WASHINGTON — The American Council of Learned Societies, the American Historical Association, the Modern Language Association, and the Authors Guild have filed a major federal lawsuit challenging the constitutionality of the Trump administration’s Department of Government Efficiency, or DOGE.

The joint motion alleges that DOGE bypassed established federal administrative procedures and violated the First Amendment and the Equal Protection Clause of the U.S. Constitution. The lawsuit focuses on an advisory panel that allegedly assumed direct executive authority to cancel approved grants.

Under the Federal Advisory Committee Act of 1972, advisory bodies are restricted to providing advice and recommendations. They are prohibited from exercising actual government power or making binding funding decisions, which are reserved for Senate-confirmed agency heads and federal officials.

Court filings say DOGE staffers Justin Fox and Nate Cavanaugh used ChatGPT, a commercial large language model developed by OpenAI, to screen National Endowment for the Humanities grant proposals for concepts related to diversity, equity, and inclusion, or DEI.

The sweep involved 1,163 grant proposals. The AI flagged 1,057 as DEI-related, and all but 42 of the flagged projects were canceled. The cuts eliminated more than $100 million, roughly half of the annual budget of the NEH, an independent agency established by Congress in 1965 under the National Foundation on the Arts and the Humanities Act.

A spreadsheet included with the lawsuit shows the automated prompts used by Fox and Cavanaugh. The instructions stated: “Does the following relate at all to DEI? Respond factually in less than 120 characters. Begin with ‘Yes.’ or ‘No.’ followed by a brief explanation. Do not use ‘this initiative’ or ‘this description’ in your response.”

Among the projects canceled was a $349,000 grant to the High Point Museum in North Carolina. The money was intended to replace the museum’s aging heating, ventilation, and air conditioning system, or HVAC, so it could maintain proper temperature and humidity controls for its historical collections and improve energy efficiency.

ChatGPT flagged the facility project by responding: “Yes. Improving HVAC systems enhances preservation conditions for collections, aligning with the goal of providing greater access to diverse audiences. #DEI.”

Edith Brady, the director of the High Point Museum, said the project was halted mid-way through. “We were able to recoup about 70% of the original award through the grant termination clause,” Brady said. That amounted to approximately $244,300 of the original $349,000 grant.

DOGE’s automated system analyzed 11 HVAC-related grants, but only two were canceled. The second was a building infrastructure grant for the Shelburne Museum in Vermont intended to address climate change risks. ChatGPT flagged it because it determined that “addressing environmental sustainability in cultural heritage preservation” fell under the umbrella of DEI.

The exhibits also list a scholarly research project examining the corporate structure of the publishing industry and literary agents, an artificial intelligence ethics center investigating AI-based technologies for eldercare, and a historical preservation project focused on compiling resources about Italian-American immigrants among the canceled grants.

The plaintiffs argue that using an automated tool to cancel grants based on content constitutes viewpoint discrimination, which is barred under the First Amendment. They also argue that targeting DEI-related initiatives amounts to unlawful discrimination based on race, ethnicity, and gender.

Internal correspondence cited in the lawsuit indicates that NEH leadership felt compelled to defer directly to DOGE’s directives, despite the advisory body’s lack of statutory authority. In an email to Fox, Michael McDonald, the Trump-appointed acting chairman of the NEH, wrote that many of the targeted projects were “harmless when it comes to promoting DEI.”

“But you have also told us that in addition to canceling projects because they may promote DEI ideology, the DOGE Team also wishes to cancel funding to assist deficit reduction,” McDonald wrote. “Either way, as you’ve made clear, it’s your decision on whether to discontinue funding any of the projects on this list.”

McDonald did not respond to requests for comment, and the White House declined to comment on the litigation.

The NEH cuts came during a broader campaign by the second Trump administration to eliminate DEI initiatives across the federal government. On his first day in office, President Donald Trump signed an executive order banning diversity training and initiatives. A March 2025 proclamation then targeted federal funds allocated to programs his administration claimed promoted “divisive narratives.”

DOGE was established on Inauguration Day as a temporary advisory panel, with Tesla CEO Elon Musk serving as its de facto leader. Musk, who served a 130-day term as a special government employee, sought to identify and cancel billions of dollars in federal contracts and grants while claiming to target $200 billion in overall spending.

The advisory group also drove the cancellation of 29 Department of Education grants worth $101 million, which DOGE claimed were connected to DEI training. In April 2025, the Department of Defense, led by Defense Secretary Pete Hegseth, removed approximately 400 books from the U.S. Naval Academy library that officials alleged were linked to DEI concepts.

Musk’s formal role with DOGE concluded at the end of May 2025. By November 2025, Scott Kupor, the director of the Office of Personnel Management, confirmed that DOGE had ceased to operate as a centralized entity.

The administration said the grant cancellations were intended to lower the national debt, but the initiatives did not alter the nation’s balance sheet. In a deposition related to the lawsuit, Cavanaugh was asked by plaintiffs’ attorneys whether the panel’s efforts had reduced the federal deficit.

“No, we didn’t,” Cavanaugh testified.