Xiaodi Hou, co-founder and former CEO of autonomous trucking startup TuSimple, urged a California district court to issue a short lived restraining order to prevent the corporate from moving its remaining U.S. assets to China, according to a recent court filing.

Hou, who plans to file for a short lived restraining order in December at his next scheduled court hearing, hopes to stop TuSimple from moving tens of tens of millions of dollars in money to China. As of September, TuSimple had capital of about $450 million. Hou can be asking for expedited discovery of evidence to support his conclusions.

Hou’s statement to the court is the newest escalation in a dispute between TuSimple and a few shareholders over attempts to use investor capital to finance a brand new business in China related to AI-generated animations and video games.

This is the primary time Hou – who was ousted as CEO in 2022 – has publicly accused TuSimple and its leaders of funneling assets to animation and gaming corporations owned by or with Mo Chen, TuSimple’s co-founder and CEO related. management board under the guise of a business axis. Hou also argued that the corporate violated SEC rules by failing to inform shareholders or obtain shareholder consent before changing its business direction or transferring funds to China.

Hou now heads a brand new autonomous trucking startup in Texas

TuSimple, once valued at $8.5 billion after its 2021 IPO, faced setbacks that led to its U.S. company shutting down and delisting from the stock exchange in January 2024. The company’s stated goal was to commercialize its AV technology in China. However, because the yr progressed, TuSimple reduced its workforce, stopped operating autonomous vehicles, and commenced hiring staff to perform AI-based gaming and animation tasks.

In August, shareholders sent a letter to the board after learning that TuSimple was devoting resources to AI-based games and animations. Management responded a couple of weeks later by publicly announcing the creation of a brand new business unit.

This week, Hou urged the court to issue a short lived restraining order after noting a request filed by TuSimple China that signaled the corporate intended to transfer money (or had already done so) from the United States. TuSimple China’s two subsidiaries saw their assets grow to a complete of $150 million last week, according to Hou’s declaration and data in public documents.

“These statements indicate a suspicious increase in the value of assets registered between these two subsidiaries in a single day, which is a precursor to the transfer of a large amount of cash from the US to China,” the statement said. “The most likely scenario is that the filings in China were a preparatory step before TuSimple US transferred the money to its subsidiaries in China.”

Hou added that such large money transfers “are outside the normal course of business” and are comparable to TuSimple China’s “heyday when the company had a large fleet of autonomous trucks in Shanghai” and employed about 700 employees. In September, TuSimple China had roughly 200 employees.

The opportunity for shareholders like Hou to get what they need – which is to liquidate TuSimple in order that they can recoup a few of their losses – is shrinking.

TuSimple is in a gray area when it comes to Securities and Exchange Commission enforcement. Although TuSimple was delisted earlier this yr, the corporate continues to be registered with the SEC and subsequently subject to U.S. scrutiny. Once the cash goes to China, U.S. shareholders may have no way to get well their original investment.

TechCrunch reached out to the SEC to discover whether the agency is investigating TuSimple over shareholder complaints.

TuSimple didn’t immediately respond to TechCrunch’s request for comment.

US drone maker Skydio has raised a $170 million extension round, adding to its $230 million Series E that closed early last yr.

The recent tranche of financing is attracting strategic investors resembling Japanese telecommunications operator KDDI and Axon, developer of the stun gun and other police technology. It also includes previous investors resembling Linse Capital, which owns greater than 21% of the drone maker.

The recent financing comes at a time of dynamic growth within the financing of defense technologies, and transactions on this sector in the primary half of 2024 will generate over USD 9.1 billion, in response to PitchBook.

“To be honest, we don’t mind investing,” said Linse Capital managing director Bastiaan Janmaat. “Because the valuation is the same even though the company has doubled in value.”

TechCrunch reviewed a presentation prepared this summer by Linse Capital for a potential Series F round, which showed the investor expected a $200-300 million raise at a Series E valuation of $2.2 billion. Janmaat told TechCrunch that Skydio opted to increase the E series as an alternative. “We were of the mind that ‘hey, let’s do a big F series now,’ and that’s what we initially promoted our LPs,” Janmaat said. “But you know, we can’t force Skydio to do this.”

Janmaat said the extension round was sparked by KDDI’s interest. Ultimately, KDDI invested roughly $60 million in Skydio and plans to position drones in 1,000 locations across Japan, in addition to help Skydio provide LTE connectivity for drones there.

Linse’s presentation also shows how Skydio is attempting to diversify its revenues and achieve profitability. According to the presentation, the startup had greater than $100 million in annual revenue last yr. Thirty percent of that got here from software. According to the deck, Skydio also posted a gross margin of 38.1% in 2023, “driven by a favorable mix shift towards software revenues and economies of scale in production costs.”

The company has gained significant popularity amongst enterprise and public safety customers, especially because the official retirement of its consumer drone products in 2023. Linse Capital projected that Skydio would generate roughly $180 million in revenue in 2024 despite this modification , in response to the waist.

Skydio’s military situation also looks favorable: of the pending reservations value USD 1.2 billion, over 50% were ordered by customers from the defense sector.

In addition to winning law enforcement contracts across the country, Skydio has enlisted the assistance of certainly one of its investors: Earlier this month, TechCrunch reported that Andreessen Horowitz partner Ben Horowitz, who invested in Skydio, donated money to assist the Las Vegas Police Department purchase drones Skydio. The approach, which allowed Skydio to bypass typical procurement and bidding processes, raised concerns amongst advocacy groups.

However, Janmaat told TechCrunch he believes donating technology to police is a smart approach, assuming the technology is value using by police.

“At the end of the day, police departments don’t shove crappy technology down their throats,” he said. “They get amazing technology at their fingertips faster than would otherwise be possible.”

Even with a massive round of extensions and expiring contracts with law enforcement, Skydio, like many hardware startups, is about to spend a lot of capital quickly.

The presentation detailed how Skydio predicted it could burn through $238 million by 2029. Meanwhile, Linse Capital modeled expenses of around $350 million over the identical period. Janmaat told TechCrunch that Linse encouraged Skydio to “be aggressive” and burn more capital by adding more products more quickly, given the dearth of competition in North America. A Skydio representative said that these fuel consumption rates are usually not included in any of the corporate’s reports and that the startup cannot confirm them.

Ultimately, nonetheless, Linse’s data paints a more bearish picture of the approaching five years than Skydio’s own forecasts. “Our job as investors is to be a little more conservative,” Janmaat said.

Skydio’s future still depends largely on hardware releases, in addition to convincing law enforcement and utility firms to buy Skydio drones over competitors like Brinc and Chinese drone maker DJI.

Greater scrutiny of Chinese drones on the state and federal levels could help Skydio boost domestic sales, in response to the presentation. But Skydio can also be facing this problem the opposite way around: Just last month, China imposed sanctions on Skydio for selling drones to Taiwan, which affected the drone maker’s battery power.

Does Janmaat think this was really as a result of cooperation with Taiwan or punishment for lobbying against DJI?

“Oh, it’s both,” he said.

Elon Musk’s lawsuit was filed against OpenAI, accusing the corporate of abandoning its non-profit mission withdrawn in July, simply to be there reborn in August. Now in corrected criticismthe lawsuit names recent defendants, including Microsoft, LinkedIn co-founder Reid Hoffman, and former OpenAI board member and Microsoft vice chairman Dee Templeton.

The amended filing also adds recent plaintiffs: Neuralink executive and former OpenAI board member Shivon Zilis and Musk’s AI company, xAI.

Musk was considered one of the unique founders of OpenAI, which was tasked with researching and developing artificial intelligence for the advantage of humanity, and was originally founded as a nonprofit organization. He left the corporate in 2018 after disagreements over its direction.

In the criticism, Musk’s lawyers argue that OpenAI is “actively trying to eliminate competitors” like xAI by “extracting guarantees from investors to not finance them” He also allegedly unfairly advantages from Microsoft’s infrastructure and expertise in what Musk’s lawyer describes within the lawsuit as a “de facto merger.”

“xAI was harmed by, among other things, … the inability to obtain computing power from Microsoft on terms nearly as favorable as OpenAI … and the exclusive exchange between OpenAI and Microsoft of confidential competitive information,” reads the criticism filed late Thursday in a federal court in Oakland, California .

Hoffman’s position on the boards of Microsoft and OpenAI, as well as a partner on the investment firm Greylock, gave Hoffman a privileged – and illegal – view of the businesses’ activities, the criticism alleges. (Hoffman stepped down from OpenAI’s board in 2023.) Greylock invested in Inflection, notes Musk’s general counsel, a man-made intelligence startup that Microsoft acquired earlier this 12 months — and which, in response to the criticism, could reasonably be considered an OpenAI competitor .

As for Templeton, whom Microsoft briefly named a non-voting board observer for OpenAI, the amended filing alleges that she can have facilitated agreements between Microsoft and OpenAI that violated antitrust rules.

“The purpose of the directorate merger prohibition is to prevent the sharing of sensitive competitive information in violation of antitrust laws and/or to provide a forum for coordinating other anticompetitive activities,” the criticism says. “Allowing Templeton and Hoffman to serve as members of OpenAI…. management undermined this goal. “

In addition to Microsoft, Hoffman and Templeton, California Attorney General Rob Bonta was named as a defendant in Musk’s criticism. Bloomberg reported this month, OpenAI is in talks with Bonta’s office in regards to the technique of changing the company structure.

According to the amended criticism, Zilis, who stepped down from OpenAI’s board in 2023 after roughly 4 years as a member, is taken into account an “injured employee” under the California Corporations Code. Zilis has repeatedly raised concerns about OpenAI’s internal dealings which have gone unheeded – which the criticism says are broadly much like Musk’s concerns.

Zilis has close ties to Musk, having worked as a project director at Tesla from 2017 to 2019 and likewise led research on Neuralink. (Neuralink is Musk’s brain-computer interface enterprise.) She can also be the mother of Musk’s three children, Techno Mechanicus, and twins Strider and Azure.

The 107-page amended criticism includes the bizarre detail that OpenAI CEO Sam Altman proposed that OpenAI sell its own cryptocurrency in January 2018 before it ultimately decided to change to a capped-profit structure.

“Please note, I have spoken with part of the security team and there have been many concerns regarding the ICO and possible unintended consequences in the future,” Altman wrote in an email to Musk dated January 21, 2018, in an attachment filed with the amended criticism. could be seen. ICO, or initial coin offering, is an unregulated way of raising funds for cryptocurrency corporations. “I want to emphasize the need for confidentiality, but I think it’s really important that we get buy-in and give people a chance for early assessment.”

Musk allegedly rejected the thought of ​​selling cryptocurrencies. “I have considered an ICO approach and will not support it,” he wrote in an email response to Altman and OpenAI founders Greg Brockman (now OpenAI CEO) and Ilya Sutskever (OpenAI’s former chief scientist), the exhibit shows. “In my opinion, it would just cause a huge loss of credibility for OpenAI and everyone associated with the ICO.”

The essence of the lawsuit stays unchanged on the plaintiffs’ side: OpenAI benefited from Musk’s early involvement in the corporate, and yet it abandoned its nonprofit commitment to make the outcomes of its artificial intelligence research available to all. “No amount of clever design or excess of creative deal-making can overshadow what is happening here,” the criticism reads. “OpenAI, Inc., co-founded by Musk as an independent charity committed to security and transparency… is (rapidly) becoming a wholly-for-profit subsidiary of Microsoft.”

OpenAI sought to dismiss Musk’s lawsuit, calling it “noisy” and baseless.