Tesla shareholders sue Musk over new AI venture.
Shareholders are suing CEO Elon Musk and Tesla’s board over Musk’s launch of xAI, a competing AI company. The lawsuit alleges that Musk diverted talent and resources from Tesla to xAI, breaching fiduciary duties and ethics codes. The complaint, filed by Cleveland Bakers and Teamsters Pension Fund in Delaware Chancery Court, seeks Musk’s disgorgement of xAI stake to Tesla. It highlights Tesla’s role in enabling xAI with AI-related data and diverting Nvidia chips. Plaintiffs criticize Tesla’s board for allowing Musk’s actions, comparing them to a CEO starting a rival company.
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