Tesla shareholders sue Musk for starting competing AI company
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Tesla shareholders are suing CEO Elon Musk and members of the automaker’s board of directors over Musk’s decision to start xAI, a competing AI company, and divert talent and resources from Tesla. The lawsuit alleges that Musk and the board breached fiduciary duties to shareholders and unjustly enriched Musk by allowing him to launch a competing company. The plaintiffs are asking the court to force Musk to disgorge his stake in xAI and hand it over to Tesla. The suit was filed just before Tesla's shareholder meeting, where shareholders will vote on a $56 billion compensation package for Musk. The lawsuit comes after Musk threatened to develop AI outside of Tesla unless he is awarded more voting control over the company. Musk launched xAI in 2023 and recently secured $6 billion in funding for the startup. The lawsuit claims that Tesla has been diverting talent and resources to xAI, with at least 11 employees joining xAI directly from Tesla. The plaintiffs also allege that Musk diverted a shipment of AI processors from Nvidia that had been reserved for Tesla to his social media company X. The lawsuit accuses Musk and the board of breaching their fiduciary duty to protect the interests of Tesla and its shareholders.

#Tesla #ElonMusk #Ai #Shareholders #Lawsuit

https://techcrunch.com/2024/06/13/tesla-shareholders-sue-musk-for-starting-competing-ai-company/