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

Sen. Elizabeth Warren, D-Mass., is asking the Tesla board if it’s looked into CEO Elon Musk’s use of company resources to benefit his other ventures, including SpaceX and xAI.

“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 of 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 Aug. 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.

Read the full letter here: