Tesla investors filed a major lawsuit alleging that Elon Musk transferred resources to his new artificial intelligence initiative xAI. The reason for the lawsuit is that Tesla employees and Nvidia GPUs were directed to xAI. Let’s take a look at the details of the event together.
Tesla executives filed a lawsuit against Elon Musk for allegedly transferring resources to xAI
Tesla investors sued Elon Musk and the Tesla board of directors in the Delaware Court of Chancery. The lawsuit alleges that Musk directed resources to xAI, which harmed Tesla. This use of Tesla’s resources also negatively affected the company’s progress in the field of artificial intelligence.
It is also claimed that Tesla’s data was used in xAI’s software and hardware development. The plaintiffs argue that this situation harmed Tesla’s interests and that the board’s silence on this situation was negligence.
After Musk expressed his need for Tesla’s Nvidia H100 GPUs, these GPUs are allegedly destined for xAI and X (formerly Twitter). Nvidia emails published by CNBC confirm this guidance. Musk’s statement that Tesla does not have a suitable place for these GPUs is met with skepticism by investors.
Additionally, in xAI’s investor presentations, it is stated that it is planned to catch up with companies such as OpenAI and Anthropic in the field of AI by using the data obtained from X and Tesla. Investors argue that Musk used Tesla-owned information to attract investors to xAI and was not appropriately compensated for that information.
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The lawsuit also highlights the Tesla board’s loyalty to Musk and potential conflicts of interest. In an earlier case, the Delaware Court of Chancery found that a majority of Tesla’s board was dependent on Musk or had conflicts of interest. Similar allegations are made in the new lawsuit and it is stated that the board of directors did not take sufficient measures to prevent this situation.
Investors demand compensation for the losses suffered by Tesla and the transfer of Musk’s shares in xAI to Tesla. It is eagerly awaited how Tesla and Musk will respond to this case. What are you thinking? Please don’t forget to share your thoughts with us in the comments section below.