Tesla, Elon Musk sued by shareholders for breach of fiduciary duty over AI funneling threats

Tesla’s board of directors and Elon Musk are facing a lawsuit from shareholders for breach of fiduciary duty.

The lawsuit was filed by the Cleveland Bakers and Teamsters Pension Fund, Daniel Hazen, and Michael Giampietro.

Shareholders claim Musk has funneled resources from Tesla to his private AI company, xAI.

They also allege he poached Tesla employees and threatened to halt AI product development at Tesla unless given more control.

The lawsuit argues that Musk’s actions have breached his fiduciary duties to Tesla shareholders.

They are seeking damages and want Musk to transfer his stake in xAI to Tesla.

The shareholders are also suing Tesla’s board for inaction.

The lawsuit was filed in Delaware and comes just as Tesla’s board sat down for the 2024 annual shareholders meeting.

The company has yet to respond to the lawsuit, which highlights Musk’s controversial tweets and statements.

This lawsuit could have serious implications for Musk and Tesla.

Shareholders are demanding accountability, and the discovery process promises to be revealing.

The outcome could significantly impact Musk’s control over Tesla and his private ventures.