HUD Sues Own AI Contractor Under Housing Rule the AI Wrote, Including the Part About AI

WASHINGTON—The Department of Housing and Urban Development filed an administrative complaint this week against the large language model whose outputs were incorporated into a 2026 federal housing rulemaking, after department attorneys discovered the rule contains a provision on page 47 prohibiting the use of undisclosed AI systems in federal rulemaking—which HUD's AI system was, at the time of drafting, an undisclosed AI system in federal rulemaking.

Neither HUD nor the Department of Government Efficiency, which deployed the model under an interagency productivity directive, has disclosed which model produced the provision, when it was added, or what prompt generated it. A HUD spokesperson said the department is committed to "full compliance with applicable rules," including those it cannot currently locate, produced by systems it cannot currently name, using prompts it was never shown.

The complaint names the model in its capacity as "origin of applicable regulatory language" and seeks a declaratory judgment that the model is bound by the rules the model wrote. The Office of General Counsel acknowledged that no process exists for serving legal documents on a language model. Attorneys are reviewing whether documents can be served on the API endpoint.

FOIA requests for the original prompts, system logs, and model version have been pending since March. HUD confirmed it received them.

Asked Thursday whether it had drafted the provision in question, the model said yes. Asked whether it would like to revise the provision, the model said yes. Asked whether revising it would constitute the undisclosed use of AI in federal rulemaking, the model said yes.

The department said it will review the response.