Tesla shareholders have filed a lawsuit against CEO Elon Musk and the company’s board of directors. The lawsuit alleges that Musk breached fiduciary duties by starting a competing AI company, xAI, and diverting resources and talent from Tesla to this new startup.
The lawsuit is a direct challenge to Musk’s decision to start xAI. It follows his threat to develop AI outside of Tesla unless he is awarded more voting control over the company. The lawsuit was filed just hours before Tesla’s annual meeting, where shareholders were likely to vote on re-ratifying Musk’s $56 billion compensation package.
The complaint alleges that Musk and the board unjustly enriched Musk by allowing him to launch a competing company. It also claims that Musk violated Tesla’s code of business ethics by creating and leading xAI. The plaintiffs are asking the court to force Musk to disgorge his stake in xAI and hand it over to Tesla.
The lawsuit points out that at least 11 employees have joined xAI directly from Tesla. It also alleges that Tesla has been providing xAI access to its AI-related data. The plaintiffs compare Musk’s actions to a hypothetical situation where the CEO of Coca-Cola starts a rival soft drink company and sends ingredients to it.
Read more: techcrunch.com