The suit challenges Musk's decision to start xAI, alleging diversion of talent from Tesla. It also questions Musk's threat to develop AI outside Tesla without more voting control.
The lawsuit, filed before Tesla's annual meeting, accuses Musk and the board of breaching fiduciary duties. Plaintiffs seek to force Musk to give up his xAI stake to Tesla.
Tesla's valuation is linked to Musk's claim that it's not just an EV maker but also an AI company. The suit argues that Musk's focus on xAI undermines Tesla's core business.
The complaint compares Musk's actions to a scenario where the CEO of Coca-Cola launches a competing beverage company, highlighting the unprecedented nature of Musk's conduct.
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