A US federal judge has ruled that grant cuts carried out under Elon Musk-backed DOGE were unlawful after staff reportedly used ChatGPT and keyword searches linked to diversity, gender and race to help terminate funding programmes across the National Endowment for the Humanities.

ABC News reported that the decision, issued on Thursday by US District Judge Colleen McMahon in New York, blocks the Trump administration from enforcing the disputed grant cancellations.

The Department of Government Efficiency, widely known as DOGE, was created after Donald Trump returned to office in January 2025 and tasked Musk with helping reduce federal spending. Agencies across the government were quickly instructed to suspend DEI-related programmes and place diversity staff on leave, part of a wider push against initiatives tied to equity and inclusion policies.

The latest ruling offers one of the clearest judicial rebukes yet of how those cuts were carried out. Judge McMahon said DOGE staff lacked the authority to terminate grants and criticised what she described as a process that failed to resemble any normal federal review system. ‘There can be no serious dispute that the review process implemented by DOGE did not conform to, or even resemble, NEH’s ordinary grant-review process,’ she wrote.

DOGE Grant Cuts Rebuked by Court

Testimonies from former DOGE staff members Justin Fox and Nate Cavanaugh said ChatGPT and keyword searches were used to help decide which federal grants should be cut. Court records show that terms including ‘DEI,’ ‘Equity,’ ‘Inclusion,’ ‘BIPAC,’ and ‘LGBTQ’ were part of the review process.

McMahon said that approach may have broken the law because it appeared protected groups and identities were being used as reasons to remove funding. ‘Treating Black civil-rights history, Jewish testimony about the Holocaust, the oft-forgotten Asian American experience, the shameful treatment of the children of Native tribes, or the mere mention of a woman as a marker of lack of merit or wastefulness is not lawful,’ she said.

The judge also raised concerns about cuts affecting Holocaust-related projects and grants focused on Jewish history. She said it was especially concerning that projects about Jewish women who survived Nazi persecution were targeted at a time when antisemitism is again becoming more visible in the US.

‘At a time when the specter of antisemitism has reemerged from the shadows, for our government to deem a project about Jewish women disfavored because it centered on Jewish cultures and female voices is deeply troubling,’ she wrote.

It is still unclear how much influence artificial intelligence had over the final decisions. The testimony suggests ChatGPT was used during the review process, but agency leaders reportedly still had the final say on which grants were cancelled.

Musk’s Questionable DOGE Team

The controversy deepened after it emerged how quickly the cuts were carried out and who was involved. Fox and Cavanaugh had no prior government experience before joining the programme. Both came from finance and tech backgrounds.

In depositions released earlier this year, they defended the cuts as part of an effort to reduce federal spending. Cavanaugh was asked directly whether he felt bad about people losing money and support because of the decisions. ‘No. I think it was more important to reduce the federal deficit from $2 trillion to close to zero,’ he replied.
But when questioned further about whether DOGE actually achieved that goal, his answer was much more straightforward. ‘No, we didn’t,’ he said.
The organisations that challenged the grant cancellations have welcomed the court’s decision. Groups including the American Council of Learned Societies, the American Historical Association, and the Modern Language Association brought the lawsuit.

Joy Connolly, president of the American Council of Learned Societies, said the ruling underlined why humanities funding matters. ‘The humanities are not a luxury. They are how a democracy understands itself,’ she said in a statement.

Supporters of DOGE argue that the federal government was spending too much and needed urgent reform. Critics, on the other hand, say the cuts went too far and were made without enough care for the people affected.

So far, neither Musk nor DOGE has given a detailed public response to the ruling. It is also not yet clear whether the Trump administration will appeal the decision.