Senator Warren Demands Tesla Board Investigate Elon Musk's Potential Conflicts of Interest

Sen. Warren Questions Tesla Board On Musk's Potential Conflicts Of Interest

Sen. Elizabeth Warren (D-MA) is questioning Tesla's Board of Directors about CEO Elon Musk to determine whether they have investigated the possibility of Musk using the company's resources to benefit his other investments, such as SpaceX and AI. CNBC reported that Warren wrote a 10-page letter to Tesla's Chairwoman, Robyn Denholm, asserting that the Board appears to be failing in its fiduciary duties to the company's shareholders. Warren highlighted that Musk seems to have conflicts of interest with his other companies. "Tesla's Board of Directors appears to be failing to meet its fiduciary duties to Tesla's shareholders by neglecting to address company CEO Elon Musk's apparent conflicts of interest," Warren stated. Among the concerns Warren outlined in her letter are Musk's establishment of xAI, an artificial intelligence startup, and threats he made to work on AI outside Tesla unless he was granted greater voting control, among other issues. Bloomberg reported that Warren also raised concerns about Musk potentially diverting chips from Tesla to X. Additionally, Warren questioned xAI's poaching of Tesla employees and referenced an incident where a director resigned from Tesla, describing the company as "like a family company with fiefdoms, rather than a public company with stringent rules and regulations." This is not the first time Warren has raised similar concerns. She serves on the Senate's Banking and Armed Services Committees and has previously requested that the SEC investigate Tesla and Musk. In 2022, she also sent a letter to Denholm after Musk sold billions of dollars worth of Tesla shares, with a portion of the proceeds used to finance his buyout of Twitter, which was later rebranded as "X." For years, Musk has been highly critical of Warren, even labeling her "Senator Karen." He has openly opposed her calls to increase taxes on the wealthy and her efforts to close tax loopholes affecting billionaires and corporations.

Sen. Elizabeth Warren asks Tesla's board to probe Elon Musk's potential conflicts of interest

In a 10-page letter sent Thursday to Tesla Chair Robyn Denholm, the Democratic senator said Musk's activities -- like diverting computer chips from the carmaker to his social media company X Corp. -- may be inappropriate. Musk acknowledged in June he sent the graphics processing units to X and artificial intelligence venture xAI Corp., saying they would have otherwise sat in a warehouse. Warren argued diverting the chips could be a "misappropriation of corporate resources" and said founding xAI in itself is an "unavoidable conflict of interest" for Musk. Tesla didn't immediately respond to a request for comment. The senator also raised concerns that Tesla's board may have "neglected" its corporate governance duties and that the company lacks oversight. She wants additional information to better understand whether the Securities and Exchange Commission or other regulatory agencies may need to intervene. Warren, who sits on the Senate's Banking and Armed Services committees, has voiced similar concerns in the past, and has asked the SEC to investigate Tesla before.

Tesla's board faces questions from Elizabeth Warren about Musk's corporate 'entanglements'

"Tesla's Board of Directors appears to be failing to meet its fiduciary duties to Tesla's shareholders by neglecting to address company CEO Elon Musk's apparent conflicts of interest," Warren wrote in a 10-page letter to Tesla Chairwoman Robyn Denholm on Thursday. Musk also operates Neuralink and The Boring Co. Warren sits on both the Senate's banking and armed services committees, and has expressed similar concerns in the past, including requests to the SEC to investigate Musk and Tesla. She also sent correspondence to Denholm in late 2022 after Musk sold billions of dollars worth of his Tesla shares in part to finance a leveraged buyout of Twitter, which he later rebranded X. Musk has targeted Warren with criticism for years. He's been referring to her as "Senator Karen" since at least 2021, and bristled at her calls to increase taxes for the very wealthy, to close tax loopholes for corporations and billionaires, and to crack down on corporate "greedflation." The concerns Warren listed in the letter include Musk's forming an artificial intelligence startup, xAI, outside of Tesla even as the automaker bills itself as an AI company, his threats to work on robotics and AI outside of Tesla if he didn't receive a higher level of voting control at the automaker, his encouraging Tesla shareholders to approve a $5 billion investment by Tesla into xAI, and his redirecting a shipment of costly Nvidia AI chips to X that were originally slated for Tesla. Warren's letter comes two months after CNBC reported that correspondence from Nvidia staffers also indicated that Musk diverted a sizable shipment of AI processors that had been reserved for Tesla to X. Warren is also asking about xAI's poaching employees from Tesla, and the departure of a director from Tesla reportedly because the board operated "like a family company with fiefdoms, rather than a public company with stringent rules and regulations." Warren has asked Denholm and Tesla to provide answers to the questions concerning the board's oversight of Musk and the "entanglements" between his various businesses by August 23. A spokesperson for the senator's office confirmed that Tesla and Denholm have never answered Warren's previous letters. Tesla didn't respond to a request for comment.

Elizabeth Warren is coming for Elon Musk -- and calling out his corporate 'entanglements'

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.

Elizabeth Warren Asks Tesla to Probe Musk Conflicts of Interest

Senator Elizabeth Warren has asked Tesla Inc.'s board to investigate whether Chief Executive Officer Elon Musk is using the electric-vehicle maker's resources to benefit other companies he owns and runs. In a 10-page letter sent Thursday to Tesla Chair Robyn Denholm, the Democratic senator said Musk's activities -- like diverting computer chips from the carmaker to his social media company X Corp. -- may be inappropriate. Musk acknowledged in June he sent the graphics processing units to X and artificial intelligence venture xAI Corp., saying they would have otherwise sat in a warehouse.

Breaking: Elizabeth Warren Targets Elon Musk Over xAI Investments

Tesla's response to Warren's inquiry is expected by the August 23 deadline. Massachusetts Senator Elizabeth Warren has directed sharp criticism at Elon Musk, raising concerns about potential conflicts of interest involving Tesla resources. The Senator has questioned the Tesla board if they have scrutinized Musk's use of company assets to benefit his other ventures, including SpaceX and the AI-focused startup xAI. This development has sparked heated discussions, especially in the tech and crypto markets, given the Senator's anti-crypto stance. Senate Elizabeth Warren Targets Elon Musk Elizabeth Warren, regarded as an anti-crypto senator in the cryptocurrency community, has set her sights on Elon Musk. In a detailed letter sent to Tesla's board chair Robyn Denholm, Warren inquired about whether the board has properly investigated Musk's use of Tesla resources. Notably, the Senator expressed concerns that Musk might be leveraging Tesla's assets to bolster his other companies, including SpaceX and the newly formed xAI. The letter cites several instances where Musk's actions could be seen as breaches of his fiduciary duties. Meanwhile, she highlighted Musk's encouragement of Tesla shareholders to approve a $5 billion investment into xAI, the AI startup he recently launched. In addition, the Senator referenced reports of Musk redirecting a shipment of costly Nvidia AI chips from Tesla to X, raising further questions about his corporate conduct. The Massachusetts Senator has a history of challenging Musk's business practices. Her concerns are not new, as she has previously called for the SEC to investigate Musk's financial dealings. Additionally, the recent letter to Denholm also touches on past incidents, including Musk's sale of Tesla shares to finance the purchase of Twitter. These moves, the Senator argues, demonstrate a pattern of behavior that Tesla's board has failed to address. Speculations Soar In The Crypto Market Elizabeth Warren's latest move has resonated across the tech and crypto sectors. Known for her stringent anti-crypto views, the recent targeting of Musk has fueled speculation among investors. Many believe her actions could signal a broader regulatory push against the industry, which Musk has increasingly become a part of through his ventures in AI and technology. Meanwhile, former President Donald Trump's recent announcement of an upcoming interview with Musk has further intensified the discussions. Trump, who has shown a growing interest in cryptocurrency lately, is set to meet Musk next week, leading to speculation about what their conversation might reveal. Having said that, some wonder if the interview will shed light on Elon Musk's intentions in the crypto space and whether the Massachusetts Senator's criticisms will be addressed. As the August 23 deadline for Tesla's response to inquiries approaches, the tech and crypto worlds will be watching closely. This clash between a powerful Senator and one of the world's most influential tech leaders could have far-reaching implications. Precisely, the market will keep a close track of the move's potential implications on xAI.