Several Tesla shareholders have accused Elon Musk and the company's board of directors of deliberately diverting talent and resources from the company to Musk's rival artificial intelligence company, xAI.
In the lawsuit, the shareholders allege that Musk and the board breached their fiduciary duties to Tesla by launching xAI, which was founded in 2023 on the premise of understanding the “true nature of the universe.”
The plaintiffs filed the suit in Delaware, where Tesla is still incorporated, just hours before Tesla shareholders were set to vote on reincorporating the company in Texas after a Delaware judge invalidated Musk's huge compensation package. Business Insider and TechCrunch.
They note that Mr. Musk has long sought to position Tesla as a robotics and AI powerhouse rather than a car company, a claim that helped drive up Tesla's stock price, making it worth more than the major automakers combined.
All the while, Musk “diverted scarce talent and resources from Tesla to xAI, raising billions of dollars for xAI while touting xAI's access to Tesla's AI-related data,” the complaint states. Last week, xAI raised $6 billion in its first funding round and said it would use the funds to bring its first product to market. To date, xAI has released Grok, a purportedly more advanced version of OpenAI's ChatGPT, available via X but only to premium subscribers.
The plaintiffs also cited a recent CNBC CNBC reported that Musk ordered thousands of Nvidia AI chips that were intended for Tesla to be repurposed for the social media company. In a post on X after the CNBC article was published, Musk said Tesla can't afford Nvidia's GPUs because its factory in Austin, Texas, is not yet complete. He also estimated that Tesla will spend $3 billion to $4 billion on Nvidia's AI chips in 2024.
The plaintiffs also cite other posts suggesting that Musk needs to increase his Tesla stock by as much as 25% to help the company become a leader in AI and robotics. They also accuse Tesla's board of directors of inaction, allowing Musk to “plunder resources from Tesla to divert them to xAI and create billions of dollars of AI-related value for companies outside of Tesla.”
This isn't the only shareholder lawsuit to emerge this week: An institutional investor has sued the company, alleging that Musk used insider information to sell Tesla shares and make billions of dollars.
