Anamika Dey, editor
Brief news
- Elizabeth Warren, a Democratic senator from Massachusetts, has written a letter to Tesla Chairwoman Robyn Denholm inquiring about the utilization of company resources by CEO Elon Musk for his other ventures, such as SpaceX and xAI.
- Warren believes that the Tesla Board of Directors is neglecting to address the conflicts of interest posed by Musk’s involvement in other businesses, which she sees as a violation of their fiduciary duties to Tesla’s shareholders.
- Warren has previously expressed similar concerns and has requested that the Securities and Exchange Commission (SEC) investigate Musk and Tesla. She has also raised concerns about Musk’s decision to establish xAI, an artificial intelligence startup, outside of Tesla.
Detailed news
Elizabeth Warren, a Democratic senator from Massachusetts, is inquiring as to whether the Tesla board has investigated the utilization of company resources by CEO Elon Musk for his other ventures, such as SpaceX and xAI.
Warren wrote in a 10-page letter to Tesla Chairwoman Robyn Denholm on Thursday that the Tesla Board of Directors is neglecting to address the apparent conflicts of interest of company CEO Elon Musk, which appears to be a violation of its fiduciary duties to Tesla’s shareholders. Neuralink and The Boring Co. are also under Musk’s control.
Warren is a member of the Senate’s banking and armed services committees and has previously expressed similar concerns, such as requesting that the Securities and Exchange Commission (SEC) investigate Musk and Tesla. In late 2022, she also corresponded with Denholm following Musk’s sale of billions of dollars’ worth of Tesla shares to finance a leveraged acquisition of Twitter, which he subsequently rebranded as X.
For years, Musk has directed criticism toward Warren. He has been addressing her as “Senator Karen” since at least 2021 and has been irritated by her proposals to impose higher taxes on the ultra-wealthy, to eliminate tax exemptions for corporations and billionaires, and to regulate corporate “greedflation.”
Warren’s letter contains several concerns, including Musk’s decision to establish an artificial intelligence startup, xAI, outside of Tesla, despite the fact that Tesla advertises itself as an AI company. Additionally, Musk threatened to pursue robotics and AI outside of Tesla if he did not receive a greater degree of voting control at the automaker, encouraged Tesla shareholders to approve a $5 billion investment by Tesla in xAI, and redirected a shipment of expensive Nvidia AI chips that were originally intended for Tesla to X.
Warren’s letter was received two months after CNBC reported that correspondence from Nvidia personnel also suggested that Musk diverted a substantial shipment of AI processors previously designated for Tesla to X. Warren is also inquiring about the abduction of employees from Tesla by xAI and the departure of a director from Tesla, which was reportedly due to the board operating “like a family company with fiefdoms, rather than a public company with stringent rules and regulations.”
Warren has requested that Denholm and Tesla respond to the inquiries regarding the board’s supervision of Musk and the “entanglements” between his numerous businesses by August 23.
Tesla and Denholm have never responded to Warren’s previous correspondence, according to a spokesperson for the senator’s office. A request for comment was not responded to by Tesla.
Source : CNBC News
