Member-only story
Tesla Shareholders Sue Musk for Starting Competing AI Company
Ever felt like you’re part of a cliffhanger series with Elon Musk as the protagonist? Well, grab your popcorn, because the saga continues! Tesla shareholders have filed a lawsuit against Musk and the board of Tesla, with some gripping allegations. Let’s dive into this hot topic.
The Lawsuit
A group of Tesla shareholders, including the Cleveland Bakers and Teamsters Pension Fund, Daniel Hazen, and Michael Giampietro, have launched a legal battle. They’re not just casually complaining; they’ve gone straight to the courts.
Key Allegations:
- Breach of Fiduciary Duties: The lawsuit claims Musk and the board let Musk set up a competing AI company, xAI, ultimately siphoning off Tesla’s talent and resources.
- Resource Diversion: Allegations include Musk diverting crucial AI processors intended for Tesla to his social media company, X.
- Talent Shift: Since xAI’s inception in 2023, at least 11 Tesla employees have reportedly joined xAI.
Backdrop of the Lawsuit
This lawsuit’s timing is quite the cherry on top. It comes just as Musk was pushing for more voting control over Tesla and leading up to Tesla’s annual meeting. Here, shareholders were expected to re-vote on Musk’s hefty $56 billion compensation package — already a point of contention.
