Several Tesla shareholders filed a lawsuit Thursday against Elon Musk and the EV giant, accusing Musk of “brazen disloyalty” for diverting AI resources and talent to another one of his companies.
The complaint was filed in Delaware state court on behalf of Tesla, which is named as a nominal defendant. The plaintiffs, which include the Cleveland Bakers and Teamsters Pension Fund, and investors Michael Giampietro and Daniel Hazen, also alleged that Tesla’s board of directors have failed to protect the interests of the company and its shareholders.
Tesla did not immediately respond to a Quartz request for comment.
The shareholders argue in the lawsuit that Musk has publicly said AI is key to the future of Tesla. “For years, Tesla and Musk have touted artificial intelligent as the key to Tesla’s future and represented that Tesla is, above all else, an AI company,” the complaint reads.
The suit event quotes a social media post from Musk in January that states, “Tesla is an AI/robotics company that appears to many to be a car company.”
However, the plaintiffs allege that Musk has been diverting critical resources from Tesla to xAI, a company Musk founded in 2023.
According to the complaint, Musk moved key AI employees from Tesla to xAI. He also allegedly redirected Nvidia computer chips intended for Tesla to xAI.
The lawsuit also alleges that Musk intentionally founded xAI to develop AI-related products that had been previously intened to be built at Tesla. They quoted another January post from Musk that said, “I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control . . . . Unless that is the case, I would prefer to build products outside of Tesla.”
The plaintiffs also accused the board at failing to perform their fiduciary duty.
“The Board has allowed Musk—the CEO and largest stockholder of Tesla—to found and lead another AI company; to plunder resources from Tesla and divert them to xAI; and to create billions in AI-related value at a company other than Tesla,” the lawsuit said.
