Musk’s xAI Is Taking Value From Tesla, Shareholder Suit Says

Elon Musk‘s move to launch and run artificial intelligence startup xAI is a conflict of interest with his role at Tesla Inc. that’s draining Tesla of talent, resources, and financial gain, a shareholder derivative lawsuit filed Thursday claims.

“The notion that the CEO of a major, publicly-traded Delaware corporation could—with the evident approval of his board—start a competing company, and then divert talent and resources from his corporation to the startup, is preposterous,” the complaint says.

The Cleveland Bakers and Teamsters Pension Fund and other Tesla shareholders filed the complaint in Delaware’s Chancery Court against Musk and Tesla board ...