Massachusetts Sen. Elizabeth Warren is accusing Tesla’s board of directors of “neglecting its duty” and asking if it has reviewed CEO Elon Musk’s plans to use the company’s resources to help his other companies.
“Regardless of his personal pursuits and his vast personal wealth, Mr. Musk has legal responsibilities to Tesla — a publicly traded company — and its shareholders,” Warren wrote in a letter addressed to Tesla board chair Robyn Denholm on Thursday. “The Tesla Board must act to ensure that Mr. Musk is meeting all of these responsibilities.”
The outreach from Warren comes after a wave of concern over Musk’s handling of his portfolio, which includes aerospace firm SpaceX and artificial intelligence startup xAI. He also leads brain chip startup Neuralink, social media company X Corp., and tunneling venture The Boring Co.
Warren, like other critics of Musk, said she is concerned with Musk’s launch of xAI as a separate venture, even as he continues to bill Tesla as an AI company and plots its future based off advancements in that industry, not electric vehicles. Much of Tesla’s future value is expected to be derived from self-driving vehicles, humanoid robots, and the “Dojo” supercomputer. Musk has also threatened to build future AI projects outside of Tesla if he doesn’t get more control over the company.
Musk had also reportedly asked Nvidia to prioritize its shipment of AI chips to X and xAI over Tesla. And, last month, asked his social media followers if Tesla should invest $5 billion into xAI, “assuming the valuation is set by several credible outside investors.” After a majority of the more than 958,000 accounts — including many of which likely have no relationship to Tesla — that took his poll said he should, Musk said he would “discuss” it with the board.
In June, Musk was sued by Tesla shareholders for his “brazen disloyalty” for prioritizing xAI over his EV maker; Musk has denied those claims.
Warren asked the board to answer a series of questions by Aug. 23, including whether there are protections in place to protect Tesla from conflicts of interest involving xAI. She also inquired about whether Tesla employees were used to benefit xAI; Several Tesla engineers have left the automaker to join xAI, in what, Musk says, was a necessary move to prevent them from joining rival OpenAI.
It’s just the latest shot fired in a years-long feud between the senator who wants to tax the rich and the billionaire with more money than most people can imagine. Since 2021, Musk has called Warren “Senator Karen,” while she has repeatedly called for inquiries into his dealings and behavior.
In March, the senator asked regulators to investigate Musk and Tesla’s board over potential conflicts of interest related to his roles at Tesla and X. A letter to the board expressing similar concerns in December received no response, Warren said Thursday.
And, in September, she said the Senate should investigate Musk’s alleged role in preventing a Ukrainian drone from attacking Russia. Warren serves on both the Senate’s Banking and Armed Services committees.