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U.S. State Department Employs AI Chatbot ‘StateChat’ to Aid Selection of Promotion Panels

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The U.S. State Department will use an AI chatbot named StateChat to assist in selecting members for its Foreign Service Selection Boards, which conduct annual reviews for promotions and personnel moves, according to a recently issued internal cable reviewed by Reuters.

StateChat, developed in-house with technology from Palantir and Microsoft, will help identify foreign service officers eligible to serve on these critical evaluation panels. However, the department clarified that the actual promotion evaluations will not be performed by AI.

The boards operate under the 1980 Foreign Service Act and are responsible for recommending career advancement of diplomats and staff, with legal mandates to ensure significant representation of women and minority groups.

StateChat has been in use since last year for tasks such as transcribing notes, drafting emails, and analyzing diplomatic communications. The cable disclosed for the first time that it would now also be applied to “perform unbiased selection” for panel membership, based on employees’ skill codes and grades. Candidates will then be screened for disciplinary or security concerns before finalizing the boards. The cable did not specifically mention measures to ensure gender or minority group representation.

The American Foreign Service Association, representing State Department employees, said it is seeking clarification on how AI-assisted selection will align with diversity and legal requirements.

The move comes amid broader expanded AI adoption in government under President Donald Trump’s administration, despite ongoing political criticism of diversity, equity, and inclusion (DEI) efforts within federal agencies.

Palantir and Microsoft have not commented on the deployment.

Treasury’s Bessent Says $2 Billion Cut from IRS Tech Budget Without Operational Disruptions

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U.S. Treasury Secretary Scott Bessent told lawmakers Tuesday that the Trump administration has already cut $2 billion from the IRS information technology budget without disrupting operations and plans to save hundreds of millions more through automation and efficiency reforms.

Speaking before a House Appropriations subcommittee, Bessent revealed that the IRS had been spending approximately $450 million annually on processing paper forms, with around 6,500 full-time staff dedicated to the task. By introducing policy changes and automating manual workflows, the Treasury aims to reduce that expense to under $20 million by the end of President Trump’s second term.

The savings so far have been achieved by eliminating unused software licenses, renegotiating contracts, and cutting what Bessent called “wasteful” IT and professional services deals. He projected long-term savings of hundreds of millions of dollars annually in IRS operations.

Bessent also defended the proposed $2.5 billion budget cut for the IRS in the fiscal 2026 White House budget, calling its current tech budget “bloated” due to the Biden-era Inflation Reduction Act, which had allocated $80 billion to enhance IRS IT and tax enforcement. That funding has since been halved by Republican-backed budget rollbacks.

Responding to Democratic concerns that budget cuts could weaken tax enforcement, Bessent said the IRS can maintain strong collections by leveraging AI tools and smarter IT infrastructure, noting that collections remain robust and that training personnel for high-end audits takes years.

He also touched on the looming U.S. debt ceiling, refusing to predict when Treasury would exhaust its borrowing authority but warning that the government is “on the warning track” — close to the limit. Bessent assured lawmakers that no gimmicks would be used to avert default and that Congress would ultimately need to raise or suspend the limit.

Bessent echoed former Treasury Secretary Janet Yellen’s stance on monitoring debt-to-GDP ratio rather than the raw debt number, and said the administration aims to both control debt levels and boost economic growth.

On a lighter note, Bessent also said the Treasury is examining ways to reduce the cost of minting nickel coins, noting: “I believe the dime is profitable.”