The Great Setback is here. The phrase refers to the fact that Big Tech is beginning to roll back some of the diversity, equity, and inclusion (DEI) programs implemented shortly after the murder of George Floyd. Most recently, Zoom announced that it had laid off its DEI team. Google and Meta have begun defunding their DEI programs, and funding for Black founders continues to decline. Lawsuits have been filed against DEI programs, forcing companies to now hide their inclusion efforts while billionaires argue over X whether DEI initiatives are discriminatory or not.
It’s clear that this year will be a turning point for DEI, especially as states continue to ban affirmative action measures and a presidential election quickly approaches. Here are all the stories you need to read to stay on top of developments regarding the current DEI response in technology.
This list will be updated, so check back regularly.
Read about the AAER vs. Fearless Fund lawsuit
In August 2023, the American Alliance for Equal Rights (AAER), founded by Edward Blum, the man who helped overturn affirmative action in education, filed a lawsuit against the fund. venture capitalist Fearless Fund for providing business grants to black women. AAER alleged that the grant discriminated against white and Asian American founders. The Fund and AAER are fighting in court, and currently the Fearless Fund is barred from making grants to other Black women.
On Instagram, Arian Simone, the Fund’s CEO, said the lawsuit hurt the fund financially, as it lost millions in potential commitments and faced staff reductions, low cash flow, fees costly legal proceedings and threatening letters. The impact of the lawsuit could go much further than just one fund, however, and could have ripple effects across the entire ecosystem.
But Fearless Fund is not the only one being sued. The Small Business Administration, the Minority Business Development Agency, and even smaller businesses like Hello Alice are being targeted and sued for attempting to implement various grant programs.
Read what reviews say about DEI
Anti-DEI rhetoric has increased significantly. Many big names in the industry, like Elon Musk, Peter Thiel, and Y Combinator founder Paul Graham, have shared their sentiments against DEI, while only a few, like Mark Cuban, have expressed support. This division is here to stay and will only deepen as billionaires continue to wield their power – and influence – to make their opinions heard.
At the same time, many are actually trying to change and become more inclusive. However, change takes time and some of the promises made have not been kept.
Learn how governments are managing DEI
California passed a bill last year that will soon require venture capital firms in the state to disclose the diversity of founders they back. Some call the bill progress in a notoriously opaque industry.
However, California is not the only state seeking to address the issue of diversity. Massachusetts plans to pass a bill that would extend employment laws to the venture capital industry; New York City venture capital firms have come together informally to create an alliance to support more diversity. There is enthusiasm around these initiatives, but also hesitation.
Rep. Emanuel Cleaver, co-chair of the Congressional Black Caucus, tried to push a bill through Congress that would make endowment investments more transparent. He ran into a problem and said a few educational institutions in the country had been downright “mean” to him and his efforts.
DEI has become a hot topic in red states, as many have moved to ban affirmative action measures. Many tech hubs are actually just blue cities, that is, more liberal cities located within red or more conservative states. These include Tulsa, Atlanta, Miami and Austin, and all are at the forefront of helping make technology more accessible to people outside of the Bay Area. But will the States that govern them put the brakes on all this progress?
Governor Ron DeSantis, for example, is a leader in adopting anti-DEI measures. From book bans to speech restrictions, he is also one of the few governors to tackle ESG investing, proposing a measure that could affect various money managers in the state of Florida.
On a national level, the Congressional Black Caucus (CBC) set out to learn more about what’s happening in tech. He recently wrote letters to OpenAI and the Department of Labor to look at how the tech industry is looking to support Black talent during this time.
OpenAI actually responded to CBC, and we got the scoop on what happened next.
Read the latest DEI funding data
Funding for Black founders has continued to decline since 2020, and last year was no different.
Read the DEI perspective from abroad
Overseas industries are turning to states, particularly regarding how marginalized founders are treated. Stay informed about how global venture ecosystems are managing DEI and what it says about progress in the United States.
France is a notoriously tricky ecosystem for Black Founders. Learn how the country is evolving into one of the most opaque adventure landscapes for people of color.
The UK, meanwhile, has made a lot of progress in funding black founders.
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