The plaintiffs allege that Musk has been "diverting scarce talent and resources from Tesla to xAI" and raising billions for xAI while promoting its access to Tesla's AI-related data. They also accuse Tesla's board of inaction, allowing Musk to "plunder resources from Tesla and divert them to xAI." The lawsuit comes in the wake of another shareholder lawsuit claiming Musk earned billions selling Tesla stock using insider information.
Key takeaways:
- Several Tesla shareholders, including the Cleveland Bakers and Teamsters Pension Fund and two individual shareholders, have filed a lawsuit against Elon Musk and Tesla's board, accusing them of diverting resources and talent to Musk's AI company, xAI.
- The lawsuit alleges that Musk and the board breached their fiduciary duty to Tesla by launching xAI, and that Musk has been diverting resources from Tesla to xAI, raising billions for xAI while promoting its access to Tesla's AI-related data.
- The plaintiffs also claim that Musk ordered thousands of Nvidia-made AI chips intended for Tesla to be diverted to a social media company, and that he suggested he needs a larger stake in Tesla to feel comfortable growing it into an AI and robotics leader.
- This lawsuit comes as Tesla shareholders are set to vote on a proposal to reincorporate the company in Texas, and follows another lawsuit filed by an institutional investor who claims Musk earned billions selling Tesla stock using insider information.