Washington state's attorney general is standing by Costco as the retail giant resists conservative pressure to ditch its diversity, equity and inclusion practices.
This week, 19 Republican attorneys general sent a letter to Costco, urging the retail giant to end "all unlawful discrimination imposed by the company" through its "divisive" DEI policies.
The attorney general for Washington state, where Costco's headquarters are located, defended the company and fired back at the Republican effort.
"I’m surprised by my Republican colleagues’ eagerness to weaponize the government against business," Washington Attorney General Nick Brown, a Democrat, told Fox News Digital. "We don’t believe in punishing private companies for making decisions that protect and enhance their workforce."
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Iowa Attorney General Brenna Bird, who led the 19-state effort against Costco alongside Kansas Attorney General Kris Kobach, vowed to "look at all available options" to ensure the business is following federal and state laws regarding race-based or gender identity-based hiring practices.
"Costco needs to show us the proof that they are following the law because they have public statements that cause us great concern," Bird said Wednesday to Fox News. "Many other big retailers have changed their policies and are now following federal law, just like President Trump is doing with his executive orders rooting out DEI, so they need to show us they're following the law."
Attorneys general from Alabama, Arkansas, Georgia, Idaho, Kentucky, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Virginia, Louisiana, Missouri, Montana, Nebraska and North Dakota also signed the letter, which gives Costco 30 days to respond.
The letter comes on the heels of Trump signing an executive order targeting DEI in the federal government and encouraging the private sector to end these "illegal" practices.
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The order tasks the attorneys general with rooting out sectors and organizations that allegedly engage in discriminatory DEI practices. Recommendations will be made for potential lawsuits against violators.
Major companies like Target, McDonald's and Walmart have backed off from their DEI policies in recent months amid growing scrutiny over these policies.
Costco has thus far resisted these challenges and defended DEI values as critical to the success of its business.
"We owe our success to the more than 300,000 employees who serve our members every day. It is important that they all feel included and appreciated and that they transmit these values to our customers," Costco board chair Hamilton "Tony" E. James said at the shareholder meeting Thursday.
At that meeting, Costco shareholders overwhelmingly rejected an anti-DEI proposal brought by a conservative shareholder group to evaluate the risks posed by its DEI practices to the company's bottom line.
James said that the company's "commitment to inclusion" neither compromises merit nor includes quotas or systematic preferences.
Constitutional law attorney and Fox News contributor Jonathan Turley told Fox News Digital on Wednesday that, "absent an unlawful policy, businesses have the right to make their own employment decisions within the parameters of the law."
"That includes mandatory training on DEI. Customers obviously have the right to make their own judgment in purchases, as shown by the response to Bud Light and Disney. However, state AGs need to be mindful of the countervailing speech and other rights afforded to corporations and organizations," he added in an emailed statement.
Fox News Digital reached out to the offices of the remaining 30 state attorneys general that did not sign off on the letter to Costco to ask if they would be taking any action, for or against the business, after Trump's executive order.
A spokesperson for Indiana Attorney General Todd Rokita told Fox News Digital, "Attorney General Rokita stands firmly against unlawful DEI practices and supports President Trump’s actions to end them in corporate America."
Maryland Attorney General Anthony G. Brown's office referred Fox News Digital to his letter, co-signed by 13 Democratic attorneys general earlier this month, urging Walmart to keep its commitment to DEI. The letter was also signed by the attorneys general of California, Connecticut, Hawai’i, Illinois, Maine, Massachusetts, Minnesota, Nevada, New Jersey, New York, Rhode Island and Vermont.
Iowa AG Bird did not respond to Fox News Digital's request for comment by publication time.
Fox News' Jamie Joseph and Taylor Penley contributed to this article.
FIRST ON FOX: A select group of tech industry titans and venture capitalists will gather in Washington, D.C., this week to welcome the incoming Trump administration and celebrate new opportunities for global innovation in artificial intelligence and entrepreneurship.
Presidents and CEOs from companies on the cutting edge of AI tech and their big financial backers, along with personnel from the incoming administration, will attend a dinner on Thursday organized by Outside the Box Ventures, a firm founded last year by journalist-turned-investment banker Katherine Tarbox, along with Laurent Bili, the French ambassador to the U.S.
The list of those invited to Thursday's dinner includes "DOGE" chief Elon Musk, Silicon Valley investor and GOP mega-donor Peter Thiel, NVCA chief executive Bobby Franklin, incoming White House AI and crypto czar David Sacks, OpenAI's Sam Altman, investor Joe Lonsdale and Narya co-founder Colin Greenspon.
"This gathering represents more than discussion. We hope it symbolizes a new chapter in public-private collaboration to harness technology’s transformative power for the nation’s future," a source close to the planning told Fox News Digital. The event comes days before President-elect Trump is inaugurated as the nation's 47th president.
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America's leading entrepreneurs want to seize what Microsoft's Brad Smith has called a "golden opportunity for American technology and economic competitiveness." The aim is for the joined forces of industry leaders and government resources that Trump brought together for Operation Warp Speed, his first administration's lauded COVID-19 vaccine program, to be reproduced for advancements in AI.
The participation of Bili reflects how France is interested in being a leader in AI, with a global action summit on the rapidly developing technology to be held in Paris this February, and believes the U.S. is a valuable partner in this effort.
"We believe this is the hottest ticket for tech and venture capital up to the inauguration," the source said. The Trump transition team did not immediately respond to a request for comment.
Franklin, the CEO of the National Venture Capital Association, the industry trade group for venture capital, confirmed he plans to attend. He told Fox News Digital there is great excitement in his industry for several of Trump's hires who have backgrounds in venture capital, including Sacks, a billionaire tech executive, and Vice President-elect JD Vance.
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"One of our challenges is always educating, and there's always a lack of understanding of what the venture industry does, how it works with entrepreneurs, how it creates great tech and drugs and everything else in the economy," Franklin said. "And so having folks that understand that coming into the administration is a wonderful, welcome situation from our perspective."
The dinner comes at a critical juncture for the U.S., which leads the world in AI startups but faces tough competition from China and other foreign adversaries.
American companies received more than 40% of global AI funding in 2023, surpassing China and the European Union combined. That same year, U.S. venture capital firms unleashed $17.9 billion in funds for AI startups, contributing to the leaps and bounds in generative AI tech popularized by ChatGPT, Google's Gemini and Grok from xAI.
More than 10,000 AI-related patents have been filed by U.S. entities in the past five years, showcasing the deep bench of American innovators that Franklin and others believe Trump stands ready to support.
But analysts warn that China's recent developments in AI technology pose a challenge to American dominance in this field and may even threaten U.S. national and economic security.
A recent report published by American Edge Project cautions that "China is rapidly advancing its own open-source ecosystem as an alternative to American technology and using it as a Trojan horse to implant its CCP values into global infrastructure."
The report called China's progress "both significant and concerning."
"Chinese-developed open-source AI tools are already outperforming Western models on key benchmarks, while operating at dramatically lower costs, accelerating global adoption. Through its Belt and Road Initiative (BRI), which spans more than 155 countries on four continents, and its Digital Silk Road (DSR), China is exporting its technology worldwide, fostering increased global dependence, undermining democratic norms, and threatening U.S. leadership and global security."
There is a broad expectation that the Trump administration will let the private sector lead the way as the U.S. confronts China. Whereas the Biden administration prioritized establishing "guardrails" for AI development through regulatory bodies, analysts for Perkins Coie note that Trump has promised to revoke a Biden-era executive order that set policy for federal agency AI purchases and uses. The 2024 Republican platform claimed Biden's policy "hinders innovation and imposes Radical Leftwing Ideas," apparently in reference to requirements that the National Institute of Standards and Technology create guidance to ensure AI models are unbiased and do not discriminate based on race or sex.
Additionally, Trump's appointment of Sacks as AI czar signals his thinking on AI is in line with Sacks' associates Musk and Thiel, who each co-founded PayPal and favor a deregulatory agenda.
"The new czar will likely be tasked with coordinating with federal agencies and outside stakeholders to ensure consistent guidance regarding AI use in the federal government. We would expect Sacks to be less focused on the potential harms of AI and more focused on promoting and facilitating AI innovation with fewer restraints," Perkins Coie said.
Thursday's gathering is a strictly nonpartisan event, though Silicon Valley's high interest in building relationships with a Republican administration would seem to signal shifting political priorities.
Previously, issues like immigration and climate change distanced Big Tech from the GOP. And when Trump first ran for president, his populist MAGA movement was an unknown factor that led many entrepreneurs to keep that distance.
But a growing recognition of AI as a national priority has appeared to bridge that gap. So has a more clearly defined Trump, with key players in his second administration that have ties to the venture capital world.
"You know, it was certainly a political outsider that won in 2016," Franklin said. "Now, he's not an outsider."
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