Updated Jan 4, 2024 - Business

Cuban vs. Musk: Entrepreneurs debate DEI

Combination images of Mark Cuban and Elon Musk. Photos: Christopher Willard/ABC, Michael M. Santiago/Getty Images

A handful of powerful, white, male entrepreneurs are tussling over the role — and essentially the need for — diversity, equity and inclusion programs, or DEI, in the workforce.

The big picture: Major employers across the U.S. have embraced DEI programs as part of their efforts to attract and retain talent, but critics of DEI have become so emboldened that it now stands out when high-profile figures in the corporate world, such as Mark Cuban, defend those initiatives.

Zoom in: Elon Musk took to X on Wednesday to "shame" anyone who uses the term "DEI," saying it's "just another word for racism."

Lululemon founder Chip Wilson, who stepped down from the role in 2013 following controversial comments, expressed his distaste to Forbes this week regarding the athleisure company's "whole diversity and inclusion thing."

  • "They're trying to become like the Gap, everything to everybody," he said. "And I think the definition of a brand is that you're not everything to everybody… You've got to be clear that you don't want certain customers coming in."
  • A Lululemon company spokesperson told Axios in an email statement that Wilson does not speak for the company, "and his comments do not reflect our company views or beliefs."

Billionaire hedge fund manager Bill Ackman wrote in an essay for The Free Press this week that DEI is "inherently a racist and illegal movement" and "[labels] white people as oppressors."

  • The Harvard alumnus has been publicly pressuring Ivy League universities in recent weeks to remove their presidents following controversial testimony at a Congressional hearing on antisemitism.
  • Ackman also wrote an open letter to his alma mater last month, calling for Claudine Gay to resign as president — which she ultimately did this week — and he said the university's DEI office was a "major contributing source of discriminatory practices on campus."

The other side: Billionaire Mark Cuban responded to Musk's post, saying, "The loss of DEI-Phobic companies is my gain."

  • Cuban went on to defend the core principles of DEI and said: "Having a workforce that is diverse and representative of your stakeholders is good for business."
  • He added that when something that impacts all employees is just a checklist item to a company's CEO, "you are going to have employees who are not comfortable for a lot of different reasons."

Of note: Prominent civil rights activist Rev. Al Sharpton led protesters picketing Ackman's New York office Thursday, condemning the billionaire's push against Gay and university diversity efforts.

  • Sharpton told Fortune that Gay's resignation is a sign of broader dangers facing DEI programs and is "a blow to the DEI movement that all of us in the civil rights community have been fighting for."
  • He added: "We were denied the ability to get certain positions, to get contracts, to get jobs. So to act like we don't need DEI is to whitewash the history of corporate America."

Between the lines: Corporate America is navigating the minefield of DEI as attacks against diversity efforts intensify, Axios' Emily Peck reports.

  • But for many employers, maintaining a diverse workforce where employees feel included is a key part of attracting and retaining workers (particularly in a tight labor market).
  • Often the anti-DEI comments comments have come from CEOs who may not understand particularly well why diversity efforts might be important to women, or Black people or any other group.
  • Musk, for one, oversees a company accused of racial discrimination multiple times while Wilson was ousted from the company he founded for making offensive comments.

What to watch: Even some companies who say they are committed to diversity are starting to approach the issue differently as backlash to DEI grows.

Go deeper: DEI backlash hits corporate America

Go deeper