Senator Elizabeth Warren, a Democrat from Massachusetts, has raised concerns about Tesla CEO Elon Musk’s use of company resources to benefit his other ventures such as SpaceX and xAI. In a 10-page letter addressed to Tesla Chairwoman Robyn Denholm, Warren accused the Tesla Board of Directors of failing to meet its fiduciary duties to Tesla’s shareholders by neglecting to address Musk’s apparent conflicts of interest.
Elon Musk, in addition to leading Tesla, also operates Neuralink and The Boring Co. Warren, who sits on both the Senate’s Banking and Armed Services committees, has been vocal about her concerns regarding Musk and Tesla in the past. This is not the first time Warren has taken action, as she had previously requested the SEC to investigate Musk and Tesla. In late 2022, Warren contacted Denholm after Musk sold billions of dollars worth of his Tesla shares to finance a leveraged buyout of Twitter, which he later rebranded X.
Specific Concerns Raised by Warren
In her letter, Senator Warren highlighted several specific concerns regarding Musk’s actions. These included Musk forming an artificial intelligence startup, xAI, outside of Tesla despite Tesla’s positioning as an AI company. Warren also expressed unease over Musk’s threats to work on robotics and AI outside of Tesla if he did not receive a higher level of voting control at the company. Additionally, Warren questioned Musk’s encouragement of Tesla shareholders to approve a $5 billion investment by Tesla into xAI, as well as Musk redirecting a shipment of expensive Nvidia AI chips from Tesla to X.
Additional Inquiries
Warren’s letter to Denholm also questioned xAI’s recruitment of employees from Tesla, as well as the departure of a director from Tesla who reportedly had concerns about the board’s operations. The director allegedly felt that the board functioned more like a “family company with fiefdoms” rather than a public company with stringent rules and regulations.
Senator Warren has requested that Tesla and Denholm provide answers to the questions raised in her letter by August 23. This is not the first time Warren has sought responses from Tesla and its leadership, as previous attempts to communicate with the company have gone unanswered. Warren’s concerns reflect a growing unease among some stakeholders about the extent of Musk’s influence and the potential conflicts of interest that may arise from his various business ventures. It remains to be seen how Tesla will respond to Warren’s inquiries and address the issues raised in her letter.
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