Tesla shareholders recently filed a lawsuit against CEO Musk and the board of directors, accusing them of improperly transferring company resources and talents to Musk's AI company xAI and violating their fiduciary duties to Tesla. The lawsuit states that Musk used Tesla resources to develop xAI and claimed that while xAI was raising billions of dollars, xAI had access to Tesla’s artificial intelligence-related data. The move raised concerns among shareholders that the company's interests were being damaged and that the board had failed to effectively prevent such behavior. The incident also reflects the growing concern over corporate governance and conflicts of interest issues as technology companies develop rapidly.
For years, Musk has tried to position Tesla as a robotics and artificial intelligence powerhouse rather than just a car company. The claim drove Tesla's stock price higher, making the company worth more than all the top automakers combined. At the same time, Musk "shifted scarce talent and resources from Tesla to xAI and promoted xAI's access to Tesla's AI-related data even as xAI raised billions of dollars," the lawsuit states. This is described in the document.
Tesla shareholders also cited a recent CNBC report accusing Musk of ordering the transfer of thousands of Nvidia-made artificial intelligence chips that were supposed to be delivered to Tesla to the social media company. After the CNBC article was published, Musk published an article on xAI saying that Tesla cannot accept Nvidia's GPUs because its factory in Austin, Texas has not yet been completed. He also estimated that Tesla will buy $3 billion to $4 billion in artificial intelligence chips from Nvidia in 2024.
Shareholders also accuse Tesla's board of directors of taking no action to allow Musk to "plunder resources from Tesla and transfer them to xAI; and create billions of dollars in AI-related value at another company."
It’s worth noting that this isn’t the only shareholder lawsuit to surface this week. An institutional investor is suing the company, claiming Musk used inside information to make billions selling Tesla stock.
The lawsuit has drawn widespread attention to the behavior of corporate executives and corporate governance, and also highlighted how to balance the relationship between innovation and corporate interests in the fast-growing technology industry. In the future, the progress of this case will serve as a warning to other technology companies and may affect the formulation of relevant laws and regulations.