US Court Rules Government Department’s AI Use in Grant Decisions Unconstitutional

• May 10, 2026

A federal judge in the United States has declared the use of artificial intelligence by the Department of Government Efficiency (DOGE) in grant-making procedures unconstitutional. The ruling came as part of a 143-page opinion that addressed the department’s methodology in assessing whether funding applicants met criteria related to diversity, equity, and inclusion (DEI).

AI Utilization in Federal Grant Processes Faces Legal Scrutiny

The court’s decision centers on DOGE’s employment of AI technology to determine if certain projects or applicants align with DEI principles. In this case, the AI tool in question was reportedly ChatGPT, an advanced language model. The department used the AI system to evaluate grant applications and guide the allocation of over $100 million in funding.

The federal judge, Colleen McMahon, criticized the manner in which the department implemented AI in this context, finding its approach both ill-advised and inconsistent with constitutional standards. The ruling pointed to concerns about the reliability and legality of relying on AI tools to make determinations that affect significant public funding and policy priorities.

This case underscores the broader challenges government agencies face when integrating emerging technologies into administrative functions without sufficient oversight or validated frameworks. The implications are significant, as agencies increasingly consider AI and machine learning to handle complex evaluative tasks.

While the government department aimed to promote DEI through grant distribution, the court’s findings indicate that the process must adhere to constitutional protections and legal frameworks governing administrative decisions. The judgment effectively invalidates the affected grant cancellations stemming from the contested AI-supported assessments.

As federal agencies continue to explore AI applications, the ruling serves as a cautionary precedent emphasizing the need for transparency, accountability, and adherence to legal standards. The intersection of AI and public-sector decision-making remains a developing area with potential for both innovation and controversy.

Details regarding the specific grant programs affected, or the next steps for the Department of Government Efficiency, have not been disclosed. However, this ruling will likely prompt reviews of AI use policies within government bodies to ensure compliance with constitutional guidelines.

A US court found the Department of Government Efficiency’s use of AI to assess diversity criteria in grant allocations unconstitutional.