DOGE’s AI Targets SEC Rules—DEI and Beyond

Employees linked to the Department of Government Efficiency (DOGE) have developed an AI system to comb through the U.S. Securities and Exchange Commission’s (SEC) rulebook. The tool is flagging regulations for potential repeal, with “diversity rules” among its early targets.

DOGE’s AI prioritizes rules the administration considers duplicative or burdensome. Beyond DEI-related requirements, its scope extends to disclosure obligations, SPAC rules, and private-fund reporting. This initiative is part of a broader “Deregulation Decision Tool” aimed at reviewing hundreds of thousands of federal regulations across agencies.

There is no single SEC DEI mandate. Instead, DOGE could challenge:

• Nasdaq’s board diversity rules, though already struck down by the Fifth Circuit and withdrawn in early 2025.

• Voluntary diversity self-assessments under Dodd-Frank §342, which could be scaled back or eliminated.

• Human-capital disclosures in annual reports, where many companies voluntarily highlight DEI metrics.
  Separately, climate disclosure rules—already weakened by the SEC’s decision to stop defending its 2024 mandate—remain a prime DOGE focus.

While the AI tool identifies vulnerable rules based on statutory grounding and economic impact, repeals require SEC rulemaking and a defensible record under the Administrative Procedure Act. DOGE’s influence on an independent regulator raises questions about agency autonomy, and its data practices are already under scrutiny following whistleblower complaints.

In the short term, DEI and climate reporting may narrow, while SPAC and fund rules could loosen, boosting deal flow. In the medium term, opaque AI-driven rescissions invite litigation, while issuers face a patchwork landscape: even if federal mandates fade, investors, states, and exchanges will continue demanding ESG and diversity data.

Bottom line: DOGE’s AI is setting the agenda, but the courts and the SEC’s process will determine what actually falls. Companies should prepare for compliance optionality and closely track SEC dockets to stay ahead of shifting requirements.