DOGE's ChatGPT Scandal and Anthropic's Billion-Dollar Leap

A federal employee handed ChatGPT a list of words like "BIPOC," "Indigenous," "Gay," and "Immigrant" and used the results to strip over $100 million in federal grants. That is not a hypothetical. That is what actually happened inside the Department of Government Efficiency — and a federal judge just ruled it unconstitutional.

US District Judge Colleen McMahon issued a 143-page decision this week, concluding that DOGE's cancellation of National Endowment for the Humanities grants violated the Constitution. The ruling came out of a 2025 lawsuit filed by humanities organizations and reads, at times, like a slow-motion audit of a process that barely qualifies as one.

At the center of the ruling is Justin Fox, a DOGE staffer who, along with a colleague, helped eliminate 97 percent of NEH's active grants. Fox's method was straightforward to a fault: take each grant description, paste it into ChatGPT with the prompt "Does the following relate at all to DEI? Respond factually in less than 120 characters," and act on whatever the chatbot said. He testified that he never defined the term DEI for the model and had, by his own admission, no idea how ChatGPT interpreted it.

That is a remarkable thing to admit under oath. You are canceling federally funded academic and cultural projects — work that Congress explicitly authorized — based on a black-box interpretation of a term you never bothered to define. The AI was not a tool supporting human judgment here. It was the judgment.

Fox also built what he called "Detection Codes," essentially a keyword list he ran against every grant description to flag what he labeled the "Craziest Grants" and "Other Bad Grants." The list included terms referencing racial minorities, Indigenous communities, immigrants, and LGBTQ+ people. Judge McMahon was direct in her assessment: DOGE treated the subjects of these grants — Black Americans, women, Jewish communities, Asian Americans, Indigenous peoples — as evidence of waste rather than as the very populations Congress had tasked the NEH to serve.

This matters beyond the courtroom drama. The ruling puts a legal stake in the ground around a practice that has quietly shaped a lot of DOGE's work: using AI to make sweeping decisions fast, without the review processes that exist for good reason. Speed is not a virtue when the process you are skipping is constitutional compliance.

The grants are now restored, pending further proceedings. But the broader question the ruling raises is harder to dismiss: if this is how decisions were being made at one agency, it is worth asking how many other funding cuts followed a similar playbook. A chatbot prompt and a keyword list is not policy. A federal judge just said so in 143 pages.

Anthropic just reported 80x revenue growth — and somehow that number is not the most surprising part of the story. The most surprising part is how quietly it happened.

The company behind the Claude family of AI models has reached a $3 billion annualized revenue run rate, according to recent disclosures. To put that in context, Anthropic was not a household name two years ago. It was the safety-focused AI lab that serious researchers respected and most consumers ignored. Now it is one of the fastest-growing enterprise software companies on the planet, by almost any measure.

The 80x growth figure covers a compressed window, which means the baseline was low enough that the multiplier looks dramatic. But the endpoint is real. A $3 billion run rate puts Anthropic firmly in the conversation with OpenAI as a commercial force, not just a research institution with good press. The gap between the two has closed faster than most analysts expected.

What drove it? Enterprise adoption of Claude is the short answer. Businesses building internal tools, customer-facing products, and workflow automation have increasingly treated Claude as a credible alternative to GPT-4 and its successors. Anthropic has leaned hard into the trust angle — positioning Claude as the model that will not go off the rails — and that pitch has resonated with risk-averse corporate buyers who have heard enough horror stories about AI gone wrong.

The timing also helped. Anthropic released Claude 3 to strong reviews earlier in the year, and the model family gave enterprise customers clear tiers to choose from. That kind of structured product line matters when you are selling to procurement teams, not just developers.

The funding picture reinforces the trajectory. Anthropic has pulled in substantial backing from Amazon and Google, which gives it both capital and deep integration pathways into two of the largest cloud ecosystems in the world. When AWS customers can access Claude natively through Bedrock, the sales motion gets a lot shorter.

None of this means Anthropic has won. OpenAI still has broader consumer recognition, a larger developer ecosystem, and the Microsoft distribution machine behind it. The competition is real and the market is moving fast enough that today's run rate is almost beside the point — what matters is whether Claude continues to improve at a pace that justifies enterprise switching costs.

But the 80x number does one important thing: it ends the narrative that Anthropic is primarily an AI safety research lab that also sells a product. At $3 billion in annualized revenue, it is a business. A serious one. The safety mission may be genuine, but this is no longer a nonprofit with a chatbot on the side.