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The logo of OpenAI is shown on a mobile phone in front of a computer screen displaying the photographs of Sam Altman, left, and Elon Musk, March 14, 2024.

Muhammed Selim Korkutata | Anadolu | Getty Images

OpenAI on Friday clapped back against Elon Musk, one of its co-founders, after the billionaire’s request last month for a federal court to stop the ChatGPT-maker from converting to a fully for-profit business.

In a blog post titled “Elon Musk wanted an OpenAI for-profit,” the startup alleged that in 2017, Musk “not only wanted, but actually created, a for-profit” to serve as the company’s proposed new structure.

“When he didn’t get majority equity and full control, he walked away and told us we would fail,” OpenAI wrote in the blog post. “Now that OpenAI is the leading AI research lab and Elon runs a competing AI company, he’s asking the court to stop us from effectively pursuing our mission.”

Musk and xAI did not immediately respond to requests for comment.

Since Musk announced the debut of xAI, his OpenAI competitor, in July 2023, the startup has released its Grok chatbot and is raising up to $6 billion at a $50 billion valuation, in part to buy 100,000 Nvidia chips, CNBC reported last month.

Musk was questioning OpenAI’s nonprofit model from day one, a member of OpenAI’s legal team told CNBC.

OpenAI’s “structure doesn’t seem optimal,” Musk wrote in a November 2015 email to OpenAI CEO Sam Altman, according to screenshots shared in the blog post. He added that receiving a “salary from the nonprofit muddies the alignment of incentives,” and that it’s “probably better to have a standard C corp with a parallel nonprofit.”

In a text conversation with former board member Shivon Zilis, OpenAI co-founder Greg Brockman wrote that a conversation he had with Musk “turned into talking about structure” and that Musk “said non-profit was def the right one early on, may not be the right one now,” according to blog screenshots.

Musk forwarded an article about China’s strategy for AI research facilities to Brockman and fellow OpenAI co-founder Ilya Sutskever. Musk wrote that China “will do whatever it takes to obtain what we develop. Maybe another reason to change course,” per the blog post.

Brockman agreed, and he wrote that starting in 2018, OpenAI’s path would need to be a “Al research + hardware for-profit,” according to the blog post. Musk wrote back, “Let’s talk Sat or Sun. I have a tentative game plan that l’d like to run by you.”

Altman, Brockman, Musk and others negotiated terms for the planned OpenAI for-profit in the fall of 2017, but the talks fell apart due to disagreements about equity, control and who would be CEO, according to the blog. Musk initially proposed that he should “unequivocally have initial control of the company” but said “this will change quickly” when the board has 12 to 16 members, per screenshots.

Musk created a public benefit corporation called “Open Artificial Intelligence Technologies, Inc” in September 2017, according to screenshots included in OpenAI’s blog post. A few days later, OpenAI rejected Musk’s proposed terms for the for-profit and offered to keep the conversation going, but Musk responded that his offer was “no longer on the table” and that “discussions are over,” per screenshots.

In January 2018, Musk proposed that OpenAI spin into Tesla, his electric vehicle company, according to the blog.

“The only paths I can think of are a major expansion of OpenAl and a major expansion of Tesla Al. Perhaps both simultaneously. The former would require a major increase in funds donated and highly credible people joining our board. The current board situation is very weak,” Musk wrote, according to the blog. He added that “OpenAI is on a path of certain failure relative to Google.”

Brockman responded with a lengthy plan, including the idea that the company should “try our best to remain a non-profit,” according to screenshots. In February 2018, Musk resigned as co-chair of OpenAI.

OpenAI’s complex history

OpenAI originally debuted in 2015 as a nonprofit and then in 2019 converted into a “capped-profit” model, in which the OpenAI nonprofit was the governing entity for its for-profit subsidiary. Altman claimed onstage last week at the DealBook Summit that the company decided to go to a capped-profit structure in part because Musk stopped funding them.

Thanks largely to the viral spread of ChatGPT, which debuted in November 2022, OpenAI has become one of the hottest, and at times one of the most controversial, startups on the planet. The company’s valuation has climbed to $157 billion since it launched ChatGPT. OpenAI has raised about $13 billion from Microsoft, and it closed its latest $6.6 billion round in October, led by Thrive Capital and including participation from chipmaker Nvidia, SoftBank and others.

The company also received a $4 billion revolving line of credit, bringing its total liquidity to more than $10 billion. OpenAI expects about $5 billion in losses on $3.7 billion in revenue this year, CNBC confirmed in September with a person familiar with the situation.

OpenAI is now in the midst of a potentially two-year process of converting into a fully for-profit public benefit corporation, which could make it more attractive to investors. The restructuring plan would also allow OpenAI to retain its non-profit status as a separate entity, CNBC previously reported.

OpenAI has faced increasing competition from startups such as Musk’s xAI and Anthropic, as well as tech giants such as Google, Amazon and Meta. The generative AI market is predicted to top $1 trillion in revenue within a decade, and business spending on generative AI surged 500% this year, according to recent data from Menlo Ventures.

A thorny legal battle

Attorneys representing Musk, his AI startup xAI and Zilis filed for a preliminary injunction against OpenAI on Nov. 29.

In their motion for preliminary injunction, attorneys for Musk argued that OpenAI should be prohibited from “benefitting from wrongfully obtained competitively sensitive information or coordination via the Microsoft-OpenAI board interlocks.”

The latest court filings represent an escalation in the legal feud between Musk, OpenAI and Altman, as well as other long-involved parties and backers including tech investor Reid Hoffman and Microsoft.

Musk in March 2024 sued OpenAI — and co-founders Altman and Brockman — in a San Francisco state court, alleging breach of contract and fiduciary duty. In the suit, Musk claimed that the early OpenAI team had set out to develop artificial general intelligence “for the benefit of humanity,” but that the project had been transformed into a for-profit entity that’s largely controlled by principal shareholder Microsoft.

In June, Musk withdrew that complaint and later refiled in federal court. Attorneys for Musk in the federal suit, led by Marc Toberoff in Los Angeles, argued in their complaint that OpenAI had violated federal racketeering, or RICO, laws.

In November, they expanded their complaint to include allegations that Microsoft and OpenAI had violated antitrust laws when the ChatGPT maker allegedly asked investors to agree to not invest in rival companies, including Musk’s xAI.

“Microsoft and OpenAI now seek to cement this dominance by cutting off competitors’ access to investment capital (a group boycott), while continuing to benefit from years’ worth of shared competitively sensitive information during generative AI’s formative years,” the lawyers wrote in the November filing. They added that the terms OpenAI asked investors to agree to amounted to a “group boycott” that “blocks xAI’s access to essential investment capital.”

Altman denied that OpenAI investors can’t invest in competitors during an onstage interview last week at The New York Times’ DealBook Summit. Altman said that investors are welcome to do so but that the company will stop their “information rights,” such as sharing its research road map and other materials.

Microsoft has invested nearly $14 billion in OpenAI but revealed in October that it would record a $1.5 billion loss in the current period largely due to an expected loss from the AI startup. Microsoft gave up its observer seat on OpenAI’s board in July, although CNBC reported that the Federal Trade Commission would continue to monitor the influence of the two companies over the AI industry.

— CNBC’s Lora Kolodny contributed reporting.

WATCH: OpenAI releases AI video generation tool Sora

OpenAI releases AI video generation tool Sora

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Huawei 2024 revenue surges to near-record high as China smartphone comeback takes hold

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Huawei 2024 revenue surges to near-record high as China smartphone comeback takes hold

The Huawei booth at the Mobile World Congress in Barcelona, 2025.

Arjun Kharpal | CNBC

Huawei on Monday reported a sharp jump in 2024 revenue as its core telecommunications and consumer businesses accelerated.

Huawei reported revenue for 2024 of 862.1 billion Chinese yuan ($118.2 billion), a 22.4% year-on-year rise.

It is the company’s second-highest revenue figure ever, according to CNBC calculations, just shy of the record 891.4 billion yuan reported for 2020.

Net profit fell, however, to 62.6 billion yuan, a decline of 28% versus 2023. Huawei said this was a result of increasing investments.

It comes as the Chinese technology giant tries to adapt its business to deal with U.S. sanctions that have restricted its access to key technologies like semiconductors.

“In 2024, the entire team at Huawei banded together to tackle a wide range of external challenges, while further improving product quality, operations quality, and operational efficiency,” Huawei’s rotating chairwoman Meng Wanzhou said in the company’s annual report.

Huawei spent 179.7 billion yuan on research and development, equating to 20.8% of its revenue. That’s higher than 2023’s 164.7 billion R&D figure. Huawei has been diversifying its business in areas including data centers for AI, cloud computing and automotive technology.

“Over the next three years, despite an economic downturn, we will increase investment in strategic depth, particularly in building foundational technologies, and seek growth opportunities through differentiation,” Meng said.

Huawei’s sales last year were driven by its two biggest businesses — ICT infrastructure and consumer — which together account for around 82% of the company’s total revenue.

Revenue at the ICT infrastructure division, which includes its carrier business, rose 4.9% year-on-year to 369.9 billion yuan. This is the Shenzhen headquartered-firm’s biggest business by revenue. Huawei is one of the world’s largest telecommunications equipment companies and the company said large-scale deployment of next-generation 5G networks had helped drive growth.

The company also said that 2024 was the first year of commercial deployment of next-generation networks, dubbed 5.5G or 5G advanced, which also helped give sales a boost.

China smartphone revival

An acceleration in Huawei’s consumer business also aided its revenue figures. The consumer business raked in sales of 339 billion yuan, a 38.3% rise and a sharp acceleration from the growth seen last year.

Huawei, once the world’s biggest smartphone player, saw its smartphone business in particular crushed by U.S. sanctions that restricted its access to key chips and Google software.

From the end of 2023, however, a semiconductor breakthrough in China allowed Huawei to regroup and release high-end phones that have sold very well domestically.

In 2024, Huawei’s smartphone shipments in China jumped 37% year-on-year, while its market share rose to 16% from 12% in 2023, according to data from Canalys. This came at the expense of Apple, which saw its market share decline and shipments fall.

Huawei has aggressively launched premium smartphones, including the first-ever trifold handset, and has also begun to slowly relaunch devices overseas.

Meanwhile, Huawei also released HarmonyOS 5 in 2024, the first version of its self-developed mobile operating system that reportedly no longer uses any open-source code from Google Android.

Still, analysts have told CNBC that Huawei’s overseas prospects remain a challenge given its lack of access to Android, which runs on the majority of the world’s smartphones, and continued restrictions in accessing the most cutting-edge chips, such as those found in Apple and Samsung devices.

New business focus

To mitigate some of the effects of U.S. sanctions over the past few years, Huawei has been pushing into new areas such as its digital power division, which includes a focus on energy infrastructure in areas such as electric cars and renewables.

This segment — still a very new business — saw revenue rise 24.4% to 68.7 billion yuan.

Cloud computing revenue came in at 38.5 billion yuan, up 8.5% year-on-year. Huawei said that when cloud sales to its own business units are taken into account, the total revenue for the division is 68.8 billion.

Huawei’s smallest business, called Intelligent Automotive Solution, reported a 474.4% year-on-year rise in revenue to 26.4 billion yuan. Huawei develops in-car software as well as driver assistance systems for third-party automakers.

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After 20 years at the helm, Klarna’s CEO Sebastian Siemiatkowski is about to face his biggest test yet

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After 20 years at the helm, Klarna's CEO Sebastian Siemiatkowski is about to face his biggest test yet

Sebastian Siemiatkowski, CEO of Klarna, speaking at a fintech event in London on Monday, April 4, 2022.

Chris Ratcliffe | Bloomberg via Getty Images

LONDON — After 20 years in the role as Klarna’s CEO, Sebastian Siemiatkowski is about to face his toughest test yet as the financial technology firm prepares for its blockbuster debut in New York.

Siemiatkowski, 43, co-founded Klarna in 2005 with fellow Swedish entrepreneurs Niklas Adalberth and Victor Jacobsson with the aim of taking on traditional banks and credit card firms with a more user-friendly online payments experience.

Today, Klarna is synonymous with “buy now, pay later” — a method of payment that allows people to buy things and either defer payment until the end of the month or pay off their purchases over a series of equal, interest-free monthly installments.

But while Siemiatkowski has grown Klarna into a fintech powerhouse, his entrepreneurial journey hasn’t been without its challenges — from facing rising competition from rivals such as PayPal, Affirm and Block‘s Afterpay, to an 85% valuation plunge.

Nevertheless, Siemiatkowski hasn’t taken those challenges lying down and the outspoken co-founder isn’t shy to challenge criticisms in the run up to an IPO that could value it at $15 billion.

‘Crazy enough’

In October 2024, CNBC met with Siamiatkowski during a visit the Swedish entrepreneur made to London. For a businessman who’s faced a rollercoaster ride of ups and downs over his two-year CEO tenure, Klarna’s chief has a calm air to him.

We now have 'a whole generation' of fintechs preparing for IPOs, says QED Investors' Nigel Morris

“Independently of all the cycles and everything we’ve gone through with the company, at any point in time I ask myself, do I still think that Klarna can become the next Google in size, that we can become a hundreds of billions dollar market company, or a trillion dollars,” Siemiatkowski told CNBC. “I still am crazy enough to think that’s achievable.”

Once a pandemic-era darling valued at $46 billion in a SoftBank-led funding round, Klarna saw its valuation plummet 85% in 2022 to $6.7 billion as rising inflation and interest rates dented investor sentiment on high-growth technology firms.

But the firm has attempted to rebuild that eroded value in the years that have followed.

Klarna makes money predominantly from fees it charges merchants for providing its payment services, in addition to income from interest-bearing financing plans and advertising revenue.

Financials disclosed in its IPO filing show that Klarna reported revenue of $2.8 billion last year, up 24% year-over-year, and a net profit of $21 million — up from a net loss of $244 million in 2023.

Bullish on AI

After the launch of OpenAI’s generative AI ChatGPT in November 2022, Siemiatkowski quickly pivoted Klarna’s focus to embracing the technology, and especially in a way that could slash costs and enhance the firm’s profitability.

However, Siemiatkowski’s strategy and his comments on AI have also attracted controversy.

Klarna imposed a freeze on hiring in 2023 as it looked to tighten costs. The following year, the company said that its AI chatbot was doing the work of 700 full-time customer service jobs.

Klarna’s CEO then said in August that his company was able to reduce its overall workforce to 3,800 from 5,000 thanks in part to its application of AI in areas such as marketing and customer service.

“By simply not hiring … the company is kind of becoming smaller and smaller,” he told Reuters news agency, adding that jobs were disappearing due to attrition rather than layoffs.

Asked by CNBC about his views on AI and the upset they have caused, Siemiatkowski suggested he was “done apologizing,” echoing comments from Mark Zuckerberg about the Meta CEO’s “20-year mistake” of taking responsibility for issues for which he believed his company wasn’t to blame.

Doubling down, Siemiatkowski added that AI “already today can do a lot of the jobs that people do — but I don’t want to be one of the tech leaders that stands on a stage and says, ‘Don’t worry about it, there’s going to be new jobs,’ because I don’t know what those new jobs are.”

“I just want to be transparent and honest with what I think is happening, and I’d rather be open about that, because I know what these people, the tech leaders are saying when they’re not on public stages, and they’re not saying the exact same things,” he told CNBC in October.

An outspoken CEO

Siemiatkowski is no stranger to defending his company in response to criticisms, especially when challenged over Klarna’s business model of offering short-term financing for all kinds of things from clothing to online takeout.

Last week, Klarna announced a tie-up with DoorDash to offer its flexible payment options on the U.S. food delivery app. However, the move was met with backlash from internet users, who said it risks saddling struggling consumers with more debt.

One X user posted a meme showing personal finance pundit Dave Ramsey with the caption, “what do you mean you have $11k in ‘doordash debt’.”

Siemiatkowski took to X to defend the move, saying that Klarna “offers many payment methods” including the ability to pay in full instantly or defer payment until the end of the month in addition to monthly installments.

“DoorDash offers many products beyond food!” Klarna’s boss said on X in response to the criticisms. “I know we are most famous for pay in 4. But you can use a credit card at DoorDash as well.”

Klarna CEO defends business model as Apple launches rival product

In 2022, the outspoken entrepreneur stressed his company was “superior” to credit cards and “extremely recession-proof” after the firm laid off 10% of its workforce.

As Klarna approaches its stock market debut, investors will likely be scrutinizing his track record and whether he’s still the right person to lead the company longer term.

Lena Hackelöer, CEO of Stockholm-based fintech startup Brite Payments, is someone who’s worked under Siemiatkowski’s leadership, having worked for the company for seven years between 2010 and 2017 in various marketing functions.

She expressed admiration for the Klarna co-founder — and pushed back on suggestions that leadership mismanaged the business during the pandemic era.

“I never thought that they had mismanaged, which is somehow how it was reported,” Hackelöer told CNBC in a November interview. “I think that they were just very much focusing on growth — because that was the direction that investors were giving.”

Rollercoaster ride

Siemiatkowski admits the journey of building Klarna hasn’t always been rosy.

Asked about the biggest challenge he’s ever faced as CEO, Siemiatkowski said that, for him, laying off 10% of Klarna’s workforce in 2022 was the toughest thing he’s ever had to do.

“That was very difficult because I didn’t predict that investor sentiment would shift that fast and people would go from valuing companies like ours so high and then to something so low,” he said.

“That’s obviously very difficult because, then you realize like, ‘OK, s—, I’m going to have to make a change. It’s not going to be sustainable to continue, and I need to protect the consumers, who are stakeholders in the company, the employees, the investors — I need to [do] what’s right for all of my constituents,” Siemiatkowski continued.

Klarna is synonymous with the “buy now, pay later” trend of making a purchase and deferring payment until the end of the month or paying over interest-free monthly installments.

Nikolas Kokovlis | Nurphoto | Getty Images

I think anyone who is a little bit sane, that’s not something you take light hearted, right? It’s a tough decision. It makes you cry. I’ve cried.

Sebastian Siemiatkowski

CEO, Klarna

The company also onboarded hundreds of new employees to capitalize and expand on the opportunity it saw from government lockdowns’ impact on consumer behavior and the broader acceleration of e-commerce adoption at that time.

“I think anyone who is a little bit sane, that’s not something you take lighthearted, right?” Klarna’s CEO said, referring to the layoffs. “It’s a tough decision. It makes you cry. I’ve cried.”

However, Siemiatkowski stood by his decision to lay off workers: “I felt like I had an obligation to my constituents, everyone, all of these stakeholders, the company, and I think it was a necessary decision at that point in time.”

The road to IPO

Now, Klarna’s CEO faces his biggest test yet — taking the business he co-founded two decades ago public.

“IPOs are risky for companies as share prices can fluctuate quickly,” Nalin Patel, director of EMEA private capital research at PitchBook, told CNBC via email. “They can be costly and lengthy to arrange with investment banks too.”

Affirm CEO: We're a replacement for credit cards, not debit cards

Klarna earlier this month filed its prospectus to list on the New York Stock Exchange. The company hasn’t yet set a date for when it will go public, nor has it priced shares.

If it succeeds, the outcome could catapult the net worth of Siemiatkowski and other shareholders including Sequoia Capital, Silver Lake, Mubadala Investment Company, and the Canada Pension Plan Investment Board.

Sequoia is Klarna’s single-largest shareholder with a 22% stake. Siemiatkowski is the second-largest, owning 7% of the business.

A positive IPO outcome would also lift the value of Klarna employees’ stakes, and potentially boost morale after a turbulent few years for the company.

“It’s a balance between finding a fair value for existing investors looking to cash out and new investors seeking a stake in Klarna at a fair price. Overvaluing the company could lead to its valuation falling in the future. While undervaluing it may mean money has been left on the table for those exiting,” Patel said.

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In Trump era, companies are rebranding DEI efforts, not giving up

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In Trump era, companies are rebranding DEI efforts, not giving up

Sundar Pichai, CEO of Google and Alphabet, attends the inauguration of a new hub in France dedicated to the artificial intelligence sector, at the Google France headquarters in Paris, France, on Feb. 15, 2024.

Gonzalo Fuentes | Reuters

After Google scrapped its diversity, equity and inclusion, or DEI, hiring aspirations in February, CEO Sundar Pichai addressed the matter with his employees at a company all-hands meeting. 

“We believe in building a representative workforce,” Pichai said, according to audio obtained by CNBC. “We’re a global company, we have users around the world, and we think the best way to serve them well is by having a workforce that represents that diversity, and we’ll continue to do that.”

“At the same time, as a company we will always have to comply with local laws,” Pichai added. 

Among the most notable changes by Google thus far was with Melonie Parker, the company’s chief diversity officer. As of February, her title has been changed to vice president of Googler engagement.

Google’s approach to DEI is emblematic of changes that companies across the U.S. are making to their DEI programs in the wake of President Donald Trump’s election and initial actions in his return to the White House. 

Over the past decade, Silicon Valley and other industries used DEI programs to root out bias in hiring, promote fairness in the workplace and advance the careers of women and people of color – demographics that have historically been overlooked.

While DEI started as an umbrella acronym to even the playing field, it’s become a loaded term.

In 2023, the Supreme Court ruled against Harvard University’s affirmative action admission policies – a decision that had implications for how corporations hire. In one of his first acts of his second term, President Donald Trump signed an executive order in January to end the government’s DEI programs and put federal officials overseeing those initiatives on leave.

The order directs “all departments and agencies to take strong action to end private sector DEI discrimination, including civil compliance investigations.” The administration has targeted nearly 50 companies that it’s deemed to be in violation of its anti-DEI rules, Bloomberg reported in February.

Among the first of those targets is the Walt Disney Company. The Federal Communications Commission informed the company on Friday that it will begin an investigation into the DEI efforts at the media giant.

Trump has shown he’s willing to fault DEI policies for human tragedy.

Following a midair collision between an American Airlines regional jet and a Black Hawk military helicopter above Washington in January, Trump blasted the Biden administration’s DEI policies for the crash without citing any evidence. Trump claimed DEI “could have been” to blame for the deadliest plane crash in the U.S. since 2001.

“When you have the president blaming DEI for a plane crash, I think it makes sense that companies don’t want to be out there no matter how they define it internally,” Emerson said.

Despite DEI becoming such a divisive term, companies are not necessarily ending their efforts. They’re rebranding them. Many companies are continuing DEI work but using different language or rolling it under less charged terminology, like “learning” or “hiring.”

Paradigm’s CEO Joelle Emerson is an advocate for diversity and inclusion.

Source: Paradigm

DEI by any other name

Joelle Emerson has worked since 2014 as a consultant for several hundred clients on workplace performance as well as diversity and inclusion strategies, but last year, she changed the language used to describe her digital platform Paradigm.

Whereas before Paradigm marketed itself as helping clients “harness the power of diversity and inclusion to create a culture where everyone can do their best work and thrive,” the company’s website now states that its solutions “create an inclusive, high-performance culture where everyone can do their best work and thrive.”

Paradigm began using DEI in 2020 after the term proliferated in the corporate response to protests across the country in the wake of George Floyd’s death. 

“We started using that a lot on our websites so that companies searching for ‘DEI’ could find us,” Emerson told CNBC. “Pre-election, as we were seeing a lot of the backlash, we reduced our use of the acronym because I didn’t think it would be the best description of what we do.”

Devika Brij, who does similar work through her Brij The Gap consulting firm, detailed her efforts to distinguish her work in a newsletter sent out in February titled “Tailored Career and Leadership Development Isn’t DEI.” For companies like Brij’s, the re-branding is critical to the future of their business – some of Brij’s clients have slashed their DEI budgets by as much as 90% since 2023, she said at the time. 

It’s not just consulting firms that are rebranding DEI. 

JPMorgan in March announced that it will replace “equity” with “opportunity” in a rebrand of its DEI program. Walmart in November said it was shifting from DEI to saying “Walmart for everyone.” Among Fortune 100 companies, there was a 22% decrease in the use of terms like “DEI” and “diversity” and a 59% increase in terms like “belonging” between 2023 and 2024, according to Paradigm. 

Google kills diversity hiring targets, reviewing other DEI programs

Emerson said 2023 marked the turning point for DEI in Silicon Valley. 

That’s when Google began getting rid of staffers who were in charge of recruiting people from underrepresented groups, CNBC reported. The company also let go of DEI leaders under Parker.

Amazon also reorganized its DEI group in 2023 and brought global teams under one umbrella named “Inclusive Experiences & Technology.” The company renamed the group to better represent the nature of the work, a company spokesperson told CNBC, adding that Amazon remains committed to building a diverse and inclusive company.

As part of that overhaul, Amazon’s Candi Castleberry changed her vice president title from “VP of Global Diversity Equity and Inclusion” to “VP of Inclusive Experiences & Technology.”

Tech’s DEI rollback has accelerated in 2025. 

Google, which has cloud-computing contracts with federal agencies, announced in February that it would retire its aspirational hiring targets following Trump’s executive orders. Google’s commitments for 2025 had included increasing the number of people from underrepresented groups in leadership by 30% and more than doubling the number of Black workers at non-senior levels.

“Our values are enduring, but we have to comply with legal directions depending on how they evolve,” Pichai told staffers at the February all-hands meeting.

He and Parker were answering a question from staffers about how the company’s DEI programs would be impacted given Trump’s recent executive orders.

“As a federal contractor, we have been reviewing all our programs, all our initiatives,” Parker said. “With regards to training, we’re going to deprecate, or stop or sunset, a number of our training programs that are focused on DEI.”

A spokesperson for Google did not clarify which of the company’s DEI programs have been cut.

Pichai went on to assure workers that Google would continue to support its employee resource groups. Those are employee-led networks within the company that focus on specific demographic or affinity groups, such as “Women@Google” and “Black Googler Network.”

Those comments, however, came before the Equality Employment Opportunity Commission published guidance in March that listed ERGs as a potential violation of Trump’s executive order if they are exclusionary. Google’s ERGs are open to all employees and do not exclude any protected groups, the company spokesperson told CNBC.

“Based on the current legal climate, we’re reviewing our DEI programs and making changes where needed,” the Google spokesperson said in a statement.

Melonie Parker speaks on stage during The 37th Annual Hispanic Heritage Awards at The Kennedy Center on Sept. 5, 2024 in Washington, DC. 

Paul Morigi | Getty Images

The sensitivity of the term DEI came to the forefront earlier this month at Austin’s annual South by Southwest conference. There, Google and Oracle had been slated to participate in a panel, originally titled “Successful Workplaces: Balancing Growth and Well-Being.” 

“Attendees will leave with actionable insights to align business success with a thriving workplace culture,” an early description of the panel noted. 

Oracle dropped out from the panel in February. That month, panel organizers informed participating companies that they were considering changing the focus of the conversation to the state of DEI in the workplace.

“The fact that the Trump administration took such an aggressive approach to DEI just made obvious, in our view, how timely this discussion was,” said panel organizer Luis Gramajo, founder of nonprofit Sunday Afternoon Foundation, which helped organize that particular SXSW panel.

The Google panelist dropped out in March after the panel’s name was officially changed to “Post-DEI Workplace: Tech Companies Managing Through Turmoil.”

“We went through I don’t know how many prep calls, we changed the title of this eight plus times, we lost people who were afraid to be on this panel,” said Chelsea Toler, one of the SXSW panelists and a co-founder at Logictry, an Austin startup.

Google was not informed of the change until late February, the company spokesperson told CNBC, adding that the panel’s new topic was outside of the employee’s role and experience.

“We had a couple different panelists back out because this conversation, which is so important, has become kind of nuclear at this point, which is wild,” said Diana Ransom, Inc. Magazine executive editor and the panel’s moderator, at the event.

Gramajo said he doesn’t begrudge any of the panelists or companies that pulled out of the panel.

“They are, as we all are, navigating an incredibly complex and uncertain time, where the rules are not clear,” he said.

Amazon CEO Andy Jassy looks on during an Amazon Devices launch event in New York City, U.S., February 26, 2025. 

Brendan McDermid | Reuters

Amazon has also pulled back on DEI. 

The company told staffers in December that it was halting some of its DEI programs as part of a broader review of those initiatives. It also eliminated references to inclusion and diversity in its annual report while altering a website to remove sections titled “Equity for Black people” and “LGBTQ+ rights.” 

Amazon CEO Andy Jassy characterized the DEI eliminations as being part of Amazon’s ongoing cost-cutting efforts

“If you look at us, kind of like a lot of other companies, particularly after George Floyd, and particularly because we’re so decentralized, we had a lot of programs in this area,” Jassy told staffers earlier this month, according to audio obtained by CNBC. “We had about 300 programs.” 

Amazon began evaluating its DEI programs “a couple years ago,” Jassy said. 

“We realized there were several of them where we weren’t getting enough value out of them for us to be investing in that way and those programs, we streamlined those,” Jassy said. “And in the programs where we were having a real impact, we doubled down.”

It’s unclear which programs Amazon cut and which it has expanded. 

Continuing the work

“The acronym of DEI is completely unhelpful,” said Aubrey Blanche-Serrallano, vice president of equitable operations at Culture Amp, a human resources platform. “Diversity is incredibly valuable and important, but that specific acronym obscures a lot of what we’re talking about.” 

For all the backlash toward DEI in Washington, recent studies show that this type of work remains popular among workers and companies. 

Pew Research in 2023 found that 86% of workers say they have a neutral-to-favorable opinion about increasing diversity, equity, and inclusion in the workplace. Paradigm, meanwhile, published a study last year which found that 73% of companies included diversity, equity  and inclusion in their company values, on par with 2023.

“The feeling of the moment doesn’t match a lot of the data I’m looking at,” Blanche-Sarellano said. 

The experts that spoke with CNBC said they’ve yet to lose any clients as a result of the DEI backlash. To the contrary, they said they are optimistic that organizations will be forced to be more thoughtful about their plans and do away with “performative” aspects of DEI that did little to move the needle.

Experts said one key example of performative actions were when companies signaled support for social media movements, like 2020’s Blackout Tuesday, without any meaningful action to follow. Another example were companies that added chief diversity officers to their ranks without giving them formalized decision-making power or budgets.

Among the changes happening now are companies shifting away from diversity reports, which tracked hiring based on different genders and ethnicities, and focusing instead on tracking the rates at which promotions and attrition happen, Emerson said. 

Companies are also changing how they have candidates apply for programs, Emerson said. With internships designed for specific ethnicities, for example, candidates might no longer simply check whether they are black or Hispanic but instead write an essay about their background, she said. 

Some experts are helping their clients calculate how much risk they may face by continuing DEI work under different names.

“There’s a lot of legal gray area right now,” Blanche-Sarellano said. “At the end of the day, they want to focus on investing in their employees, not spend all their resources on a lawsuit.”

Y-Vonne Hutchinson, chief executive officer of ReadySet, speaks during the Bloomberg Breakaway CEO Summit in New York, U.S., on Tuesday, June 18, 2019. 

Mark Kauzlarich | Bloomberg | Getty Images

Companies have to weigh the risk of regulatory compliance and the potential for public backlash against the cost of doubling down on DEI, said Y-Vonne Hutchinson, founder of ReadySet, a firm that helps clients “build adaptable organizations.”

“A lot of these companies have more diverse consumers,” she said. “They still have to think about what is going to make them money and viable businesses have to think about a global audience.”

ReadySet, for example, has what it calls a “DEI Risk Assessment Tool” which measures DEI risks across five dimensions: Legal and compliance, reputational, financial, cultural and workforce and operational risks. 

By changing the terminology that is used, companies can prevent their work from being susceptible to misunderstanding, said Emerson, adding that her firm Paradigm is advising companies to be more specific about what they want to achieve.

“We should be more precise in the language we use,” she said. 

But while some experts are encouraging companies to change their terminologies, others are advising those in the field to continue touting DEI. 

That was the case at the Post-DEI panel at SXSW. The panelists challenged the notion that they should stop using it.

“DEI means everybody has a fair and equitable opportunity to succeed,” said Fran Harris, an entrepreneur based in Austin. “We have to remind people what DEI is – it is the work. It’s not just an acronym. It’s the work of creating equal opportunities, period.”

Panelists encouraged attendees to not succumb to fear.

“In this country, when we stop using our voice because we’re scared, we’ve lost,” Logictry’s Toler said.

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