Coinspeaker
Elon Musk Expanding His Ventures, Facing Scrutiny Over Governance Issues
Investors are raising concerns over the multiplying ventures of Elon Musk. Recently, the billionaire announced the launch of xAI – a new company that focuses on artificial intelligence (AI) research and development. As a result, there is a risk of competition between Tesla Inc (NASDAQ: TSLA) and the new enterprise. Investors are wondering if there will be a devaluation of the EV giant. However, Elon Musk believes that xAI and its focus on AI would bring some value to Tesla.
Elon Musk stated:
“There were just some of the world’s best AI engineers and scientists that were willing to join a startup but they were not willing to join a large, sort of relatively established company like Tesla. So I was like, OK well, better it’s a startup that I run than they go work somewhere else. That’s kind of the genesis of xAI.”
Musk’s new xAI company aims to “understand reality” without any other details or explanation. It is also looking for ways to build an AI that is “truth-seeking” and that can “understand the nature of the universe”. The company is still in the early stages of bringing its plans to life, but is has already had an impact on competition and innovation in the field. It will definitely lead to advancements in AI technologies and applications, benefiting various industries. Besides, the launch of xAI will result in exploring alternative research directions and approaches.
As Musk has stated, xAI will compete with Google Bard and OpenAI’s ChatGPT in the future. Besides, xAI is planning to collaborate with Tesla on software and silicon alike.
Governance Issues
Last week, Senator Elizabeth Warren called the US Securities and Exchange Commission (SEC) for investigating Tesla and its board of directors to determine if they violated securities laws after Elon Musk took over Twitter. As Elizabeth Warren stated in a letter to SEC, Musk’s responsibilities “have raised concerns about conflicts of interest, misappropriation of corporate assets, and other negative impacts to Tesla shareholders”. In particular, Warren found funneling Tesla resources into Musk’s Twitter takeover, conflicts of interest regarding advertising from other car companies, and possible labor law violations when conducting transfers of some Tesla employees to Twitter. Besides, Tesla’s board had not informed shareholders properly about the ways that the two companies have worked together, or might work together.
Back in May, Tesla face a similar issue, when a group of 17 investors who hold a total of $1.5 billion of Tesla stock raised concern that Tesla’s board of directors was “failing to adequately represent the interests of Tesla’s shareholders”. At that time, pension funds and other institutional investors urged Tesla’s board to improve corporate governance and oversee Elon Musk’s actions. Seems that things have not really improved since then, therefore, SEC Chair Gary Gensler got a letter from Elizabeth Warren.
Elon Musk Expanding His Ventures, Facing Scrutiny Over Governance Issues
