Tesla and Musk Sued by Shareholders for Violation of Fiduciary Duty for Spreading Threats from AI

The Tesla board of directors and Elon Musk are being sued by shareholders for breach of fiduciary duty because Musk threatened not to develop AI products at Tesla and even to transfer resources to his private company.

Just as Tesla's board of directors convenes for its 2024 annual shareholder meeting, shareholders have filed a lawsuit against the company, the board, and Elon Musk, alleging breach of fiduciary duty.

The lawsuit was filed in Delaware by the Cleveland Bakers and Teamsters Pension Fund (CB&T), Daniel Hazen, and Michael Giampietro on behalf of Tesla shareholders.

In the lawsuit, shareholders argue that Musk violated his fiduciary duties to Tesla shareholders by funding private AI company xAI, poaching Tesla employees, threatening not to develop AI products at Tesla unless he gains more control of the company, and transferring Tesla's resources to his private company.

Shareholders are also suing Tesla's board of directors for not taking any action on these serious issues.

They are seeking damages and even a request that Musk transfer his shares in xAI to Tesla.

The company has not yet responded to the lawsuit.

This seems to be a very serious lawsuit, and the results of the investigation should be interesting. However, I think they have learned enough from Elon's tweets, statements and media reports.

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