Tesla shareholders are increasingly expressing dissatisfaction with the practice of redistributing resources between Elon Musk’s companies

Tesla was not founded by Elon Musk, although he has headed it for a long time and owns a large block of shares. Being a public company, it formally must coordinate decisions on major investments and changes with the board of directors and shareholders, and the latter are increasingly reproaching Musk for arbitrariness and filing lawsuits in court.

Image Source: Tesla

A similar management practice by Elon Musk has come into the focus of public attention in recent months due to the billionaire’s attempts to develop the AI ​​startup xAI using Tesla resources and using data from the social network X. The precedent of redistributing supplies of scarce Nvidia accelerators in favor of xAI during the period became public knowledge. , when Tesla desperately needed them. Musk later explained this maneuver by the need to find a free warehouse for a batch of these accelerators, and one was allegedly found only at the xAI farm. Tesla itself, by agreement with xAI, was later to receive the required number of Nvidia accelerators as compensation. In any case, representatives of The Wall Street Journal learned that social network X, owned by Musk, has allocated computing resources worth $250 million for the needs of xAI.

The billionaire tried to explain this by the symbiosis between the companies he controlled, because xAI was able to train its language models on data from X and Tesla, and the latter in return gained access to more advanced language models in their artificial intelligence systems. In any case, this practice in relation to the resources of the public company Tesla irritates some shareholders, and at least three lawsuits in this area are being considered in American courts. Tesla shareholders are also confused by Musk’s involvement of Tesla employees in solving the problems of the billionaire’s other companies and the redistribution of human resources between them. The bulk of Musk’s companies remain private, but he transfers the practice of managing them to the public Tesla. He recently launched a poll on the possibility of investing $5 billion of the company’s capital in the startup xAI on the pages of the social network X. Having received approval from the audience, Musk was forced to add that the issue requires approval not only from the board of directors, but also at a meeting of Tesla shareholders. In fact, such “arbitrariness” by Musk attracts the attention of even high-ranking American parliamentarians, who approach him with official requests on this topic.