DEI Backlash: Stay up to date on the latest legal and corporate challenges | Tech Crunch

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The Great Rollback Here. The phrase refers to Big Tech starting to scale back some of the Diversity, Equity and Inclusion (DEI) programs implemented after the killing of George Floyd. Recently, Zoom announced that it has laid off its DEI team. Google and Meta have begun defunding their DEI programs, and funding for block founders continues to dwindle. Lawsuits have been filed targeting DEI programs, forcing companies to now hide their inclusion efforts while billionaires argue over whether DEI programs are discriminatory.

It's clear that this year will be a turning point for DEI, especially with states banning affirmative action measures and the presidential election just around the corner. Here are all the articles you need to read to stay updated on developments in tech's ongoing DEI backlash.

This list will be updated, so keep checking back.

Read about the AAER vs. Fearless Fund lawsuit

In August 2023, the American Alliance for Equal Rights (AAER), founded by Edward Blum, a man who helped overturn affirmative action in education, sued the venture fund Fearless Fund for awarding business grants to black women. The AAER alleged that the grant discriminated against white and Asian American entrepreneurs. The fund and AAER are fighting the case in court, and currently, the Fearless Fund is barred from making grants to black women anymore.

On Instagram, Ariane Simone, the fund's CEO, said the lawsuit had financially damaged the fund, costing it millions in potential commitments and facing staff cuts, poor cash flow, expensive legal bills and threatening letters. The impact of a lawsuit, however, goes much deeper than just affecting one fund and has ripple effects throughout the ecosystem.

But Fearless Fund isn't the only one being sued. Small companies like the Small Business Administration, the Minority Business Development Agency and Hello Alice are also being targeted and sued for trying to run different grant schemes.

Read what critics are saying about DEI

Anti-DEI rhetoric increased dramatically. Many big figures in the venture, such as Elon Musk, Peter Thiel, and Y Combinator founder Paul Graham, have shared sentiments against DEI, while only a few, such as Mark Cuban, have expressed support for it. This divide will continue and deepen as billionaires continue to use their power – and influence – to make their opinions heard.

At the same time, there are many who are trying to change and become more inclusive. Change takes time, but some promises remain unfulfilled.

Read how governments manage DEI

California passed a bill last year that would soon require venture capital firms in the state to disclose a breakdown of the diversity of entrepreneurs they return to. Some hailed the bill as a breakthrough in a notoriously opaque industry.

However, California is not the only state to address diversity. Massachusetts is looking to pass a bill that would extend workplace laws to the venture industry; New York City venture firms have come together informally to create a coalition to support more diversity. There is excitement surrounding these initiatives, but also some hesitation.

Representative Emanuel Cleaver, co-chair of the Congressional Black Caucus, is trying to pass a bill in Congress that would make endowment investing more transparent. He hit a snag and said some educational institutions in the country were downright “nasty” towards him and his efforts.

DEI has become a hotbed of trouble in red states, with many banning affirmative action measures. Most tech hubs are actually just blue cities, meaning more liberal-leaning cities, in red or more conservative-leaning states. These include Tulsa, Atlanta, Miami and Austin, and all are at the forefront of helping make technology more accessible to people outside the Bay Area. But will the states they govern put a dagger in that progress?

For example, Gov. Ron DeSantis, a leader in endorsing anti-DEI measures. From book bans to speech restrictions, he is one of a handful of governors to target ESG investing, proposing action that would affect diverse fund managers in the state of Florida.

At the national level, the Congressional Black Caucus (CBC) took it upon itself to learn more about what's happening in tech. It recently wrote to OpenAI and the Department of Labor to see how the tech industry can support black talent during this time.

OpenAI actually responded to CBC, and we got a sense of what happened next.

Read the latest DEI funding data

Funding for black entrepreneurs has continued to decline since 2020, and last year was no different.

Read the DEI view from abroad

Industries abroad look to states, including how they treat marginalized entrepreneurs. Stay up-to-date on how global venture ecosystems are handling DEI and what that says about progress in the US

France is a notoriously tricky ecosystem for black founders. Learn how the country is navigating one of the most opaque venture landscapes for people of color.

The UK, meanwhile, has made great strides in funding black founders.





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