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TuSimple , once a buzzy startup considered a drawing card in self - driving hand truck , is trying to move its assets to China to fund a new AI - render animation and video secret plan business . The pivot has not only puzzled and enraged several shareholders , but also jeopardize to pull the company back into a legal morass mere weeks after reaching a preliminary settlement in a class activeness lawsuit .
Now , a fight is brew over roughly $ 450 million in funds , the bulk of which remains in the United States , TechCrunch has learn . And arguments over the company ’s mission Trygve Halvden Lie at the center of it .
Before the company officially disclosed its new job segment in August , a group of stockholder who got confidential information of the change sent a missive to the company ’s plank of manager . The letter , view by TechCrunch , alleges “ potentially fraudulent natural process ” and asks the add-in to enquire whether stock were being malversate “ to ease the growth of private venture ” established by Mo Chen , TuSimple ’s conscientious objector - founder and chairperson .
shareowner also complained the companionship failed to disclose its chase of AI vivification ; the board would finally publicly announce a new AI animation and gaming business organisation .
The group , which sent the missive anonymously in July , threatened litigation . However , at the prison term of this writing , no suits have been filed .
TuSimple’snew business segment , which is develop an animated feature film moving-picture show and television game base on the science fable serial publication “ The Three - Body Problem , ” is a startling change from its ancestry .
The China - backed startup , founded in 2015 by Chen and Xiaodi Hou , was once a Darling River in the autonomous fomite industry . TuSimple , which was headquartered in San Diego and had operations in Tucson , raised $ 648 million inventure moneyfrom Taiwanese VCs and mega companies such as Sina Corp. , as well as in high spirits - profile U.S. businesses like Nvidia , Goodyear , and UPS . It had key partnerships with Navistar and Ryder . The company’sIPO in 2021 , in which it raised another $ 1.35 billion at a post - money evaluation of $ 8.49 billion , was meant to accelerate its drive toward a commercial-grade self - drive motortruck business .
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TuSimple seemed unstoppable . But its plans were soon derail by inner dramatic play , restructuring , a lose partnership with Navistar , a ego - labor truck crash , and Union investigations into the company ’s draw with China .
TuSimple ’s stock cost plummeted as a result , falling from a high of $ 62.58 to under $ 1 a share before it voluntarily delist in January 2024 . Today , it is merchandise over the replication at around $ 0.19 per share . TuSimple ’s struggles cue the company to take stock of its operations and ultimatelyexit the U.S. The company has keep its Asia - Pacific subsidiary , known as TuSimple China .
Tied up funds and mistrust
TuSimple China is counting on accessing the cash that it has leave . Global TuSimple CEO Cheng Lu tell TechCrunch the company has about $ 450 million in hard currency .
And TuSimple retain to cover through capital . The Formosan subordinate ’s annual operating expenses exceed $ 100 million , or about $ 8 million a month , according to a declaration by Lu in a court filing from January 2024 .
Today , the bulk of the $ 450 million that remains in U.S. accounts is mostly untouchable due to three lawsuits , including a shareowner course of instruction action the company isclose to settlingfor $ 189 million . Atemporary restraining orderissued by a California territory court in January is still in burden , block TuSimple from strike assets outside of the U.S. except for transfer that are in the course of the company ’s business .
TuSimple has reason it should have full admittance to those pecuniary resource . The company take to transfer money freely to China in edict to “ commercialise self-reliant driving technology ” there , Lu said in a June 2024 declaration sent to the U.S. District Court of the Southern District of California .
“ TuSimple China will be the primary operate asset of TuSimple and , for the foreseeable hereafter , the lone substance by which TuSimple ’s shareholder — including many U.S. investors — may benefit from the commercialization of TuSimple ’s independent driving applied science , ” Lu said in theJune court filing .
The resolve says nothing about living and gambling . When asked about this , Lu said vivification and gaming fall under the scope of commercialize autonomous driving technology .
“ The run-in are ‘ commercializing the engineering , ’ and we ’re try out to commercialize technology , ” Lu said . “ If you commercialize , that means you make money off the engineering science , and we ’re trying to make money off it , plain and bare . ”
In letter of the alphabet to the TuSimple plug-in and conversations with TechCrunch , concerned shareowner say they have little faith in direction to generate value for them , and that the delisting and U.S. shutdown should have been an opportunity for the company to liquidate and redistribute wealthiness back to them .
“ The party ’s autonomous trucking operations appear to still be in the development state at upright , despite run over $ 1.8 billion in accumulated loss , ” wrote Camac Partners , an investor with a 5.6 % stake in TuSimple , in a letterto the table on May 30 . He exhort the board to keep TuSimple ’s funds in the U.S. to protect the company assets for the welfare of all shareholders .
If the contravention become into another suit , TuSimple could be further delay from transplant funds back to China . But the clock is ticking . TuSimple filed at the end of August to deregister with the SEC . While TuSimple has been delist for nine month , the company is still registered with the SEC , which mean it remains under U.S. scrutiny . Once the money goes to China , shareholders in the U.S. will have no recourse to claw back funds from their original investiture .
The international wrestling match over TuSimple ’s asset comes as foreign lineal investiture into China has seen12 - month low , and Formosan VCs with U.S. money have leftthe countryamid geopolitical tensions . Chinese firms are see forcreative waysto draw external capital .
Rolling back AVs, scaling up animation
As TuSimple pushed for those U.S.-based funds , its AV operations in China were in magnetic field .
TuSimple China had in former 2023 start out beefing up its autonomous drive team in anticipation of shutting down U.S. operation , several sources told TechCrunch .
It was that wild leek up that made what happen in former 2024 so unexpected .
In late January , roughly 10 days before the Chinese New Year the following calendar month , TuSimple announced a compulsory “ farsighted holiday ” for employees , grant to the explanation of several former employees who spoke to TechCrunch on experimental condition of anonymity . That long vacation efficaciously turn into a layoff that bear on hundreds of workers in the ship’s company ’s core autonomous vehicle business organization , according to several former employee . TuSimple told employees that if they voluntarily leave behind the company , they would receive rift . Sources say the information about severing was commune verbally during an all - workforce , so there was no written observance .
Sources also tell TechCrunch that TuSimple China ’s headcount sink from 700 to 170 , but that some employees were hire back for the animation program .
Lu has denied that TuSimple laid off staff . In an interview with TechCrunch , Lu said around 500 employees , include chief technology officer Naiyan Wang and other core tech employees , resigned en masse and of their own accord between February and May .
Lu did not provide a reason , but noted that the impermanent restraining parliamentary procedure , issue in January , caused TuSimple to lose strategical self-governing trucking partnership in China . Lu did not affirm the nature of those partnership , but in a January royal court filing , the executive said TuSimple China ’s budding partnership with the Port of Shanghai to test self - driving applied science was at risk if the temporary restraining order blocked the fellowship from share proprietary information with the larboard ’s fleet management organization . Lu ’s declaration also note the irregular restraining order menace two contracts to license the company ’s advanced driver aid technology to motortruck manufacturers in China , as well as TuSimple ’s ongoing collaboration with Nvidia .
Lu confirmed to TechCrunch that TuSimple is no longer persist ego - drive operations in the land , although he added the company is still actively looking for strategical spouse to help the company develop self - drive technical school .
Meanwhile , TuSimple spent much of 2024 licensing amusement IP and staffing up its new spiritedness and gaming business segment , according to public job list and interviews with former employees . Lu told TechCrunch that today there are around 250 employee at TuSimple China — all of whom work on both ego - driving and animation and play .
Throughout June , July , and August , TuSimple China posted new line of work listings in hunting of staff with experience in video secret plan developing and animation . The roles include titles like television editor , film director / screenwriter , game publisher , generative AI - rivet backend engineer and anchorperson for alive broadcast medium , according to public postings . One description cite TuSimple is working on a projection relate to martial artistic production and that the society owns “ multiple Chinese top IP . ”
There are also job postings that could ostensibly be for ego - driving , such as a crawler engineer , corporal development and scheme associate , and controller for the finance team .
Despite protest from some shareholders , TuSimple has defended its actions , arguing that both a interior security arrangement in 2022 with the Committee on Foreign Investments in the United States and temporary restraining orders from California courts have made it next to impossible to run self - drive operations in China . One temporary restraining order was lifted July 31 ; the other remains in place .
Lu argued the pin to spiritedness and gaming , a fast - growing $ 600 billion industry , was a consistent use of the society ’s self - driving engineering substructure and AI , one that could provide TuSimple with near - term profits .
“ We ’re admit that know - how and the technology , and we ’re going to reproductive AI by develop gamy - timbre content , video game , and animation faster using AI that in the near term we believe can generate a meaning amount of return for our shareholders , ” Lu said .
Animation and play also befall to be of personal interest to Chen , according to multiple investor , former employees , and Lu .
Chen has been a central pattern throughout TuSimple ’s nine - year history that extends beyond his co - founding status . Hisconnections helped the companyland a decisive investment in 2021 from Sina Corp. , which runs China ’s big societal media platform Sina Weibo . Charles Chao and Bonnie Yi Zhang , respectively the CEO and CFO of Weibo , were both extremity of TuSimple ’s board . Sun Dream , an affiliate of Sina , was TuSimple ’s heavy shareholder for a time , although that investmentdid lead to an investigationby the Committee on Foreign Investment in the United States .
Chen also has a personal connection withYunli Liu , who was Sina ’s head of investment funds and backed the founder ’s web gaming company , Beijing Blue Brothers , which Sina later get . Sina also controls the IP of “ The Three - Body Problem . ”
Chen ’s intertwined business interests have at times raised the ire of shareholder and caught the attention of U.S. regulator as well .
In their July letter to the board , the group of shareholders alleged Chen might be personally benefiting from TuSimple ’s move to animation and gaming . They pointed to four private animation and gaming businesses that are connect to Chen and his other businesses , TuSimple and Hydron , a Chinese inauguration launched in March 2021 to build autonomous - quick hydrogen truck .
One of business , Beijing BearBear Nation Cultural Media Co. , founded in November 2020 , name Chen as the director and legal representative . A TuSimple email address was used as the company ’s registered contact in 2021 . Another , Shanghai Xia Dao Cultural Communication Co. , had the same filing savoir-faire as TuSimple Beijing when it was founded in December 2023 , and its registered address is the same as Hydron ’s in Shanghai . The company ’s chief executive officer , Cheng Zhang , and headland of finance , Xiaoning Tian , also overlap with Hydron .
The overlap between Hydron and TuSimple , both have by Chen , has also been the subject of probe . In 2022 , after a Committee on Foreign Investment in the United States probe , TuSimple revealed that its employees spent pay hours work for Hydron in 2021 , and that confidential information was shared with the company . After reaching a national security agreement that would keep TuSimple ’s sovereign driving data , technology , and R&D in the U.S. , the instrument panel vote to oust one of its co - founders . But not the one with lineal ties to Hydron . Instead , theboard fired its CEO , Xiaodi Hou , who claim the remotion was done without cause .
The subsequent stock fall and lack of revealing around Chen ’s relationship with Hydron resulted in a course of study action lawsuit from stockholder in November 2022 that ’s still open today .
The concerned stockholder in the July board alphabetic character also call attention to two new subsidiaries TuSimple form in May 2024 , both of which lessen under the “ cultural and art diligence ” category . They suppose that TuSimple ’s lack of revealing around the newfangled underling , coupled with Chen ’s other business association , might be grounds of supposed impropriety .
TuSimple did end up disclosing its pivot to AI animation and gaming on August 14 , two week after the shareowner letter was sent .
Lu confirm the existence of the subsidiary company to TechCrunch and rebuffed the idea that TuSimple needed to break a potential business boulevard with shareholders before it was materially important . He repoint to Apple ’s Project Titan machine projection , which the ship’s company also never unwrap to stockholder publically , and noted that TuSimple really start developing computer vision for ad in 2015 .
“ company internally appear at new opportunity all the time , ” Lu said .
A paragraph detailing Mo Chen ’s connexion to other individual businesses has been updated for clarity .
