Once a highly-regarded startup in the autonomous trucking industry, TuSimple is now undergoing a striking transformation. This shift has not only left some shareholders perplexed and angry but also potentially embroiled the company in legal disputes once again. The company is attempting to transfer approximately $450 million to China to support a new AI-driven animation and video game company, sparking a fierce battle over the funds.
This transformation is nothing short of astonishing for TuSimple. Founded in 2015 by Chen Mo and Hou Xiaodi, the company was a star in the autonomous driving sector, having raised substantial funds from Chinese venture capitalists, Sina Corp, and renowned companies like Nvidia, Goodyear, and UPS. In 2021, the company went public with a valuation of $8.49 billion, once considered a leader in the autonomous trucking field. However, a series of internal turmoil, restructuring, broken partnerships, and federal investigations plunged the company into crisis, ultimately leading to its voluntary delisting in January 2024.
Image source note: The image is AI-generated, authorized by Midjourney
Now, TuSimple is attempting to reinvent itself by venturing into the AI animation and gaming sector. The company has announced the development of an animated film and video game based on the sci-fi series "The Three-Body Problem." Cheng Lu, TuSimple's Global CEO, argues that this transformation is part of the company's efforts to "commercialize technology." However, some shareholders are skeptical, believing the company should liquidate and return funds to investors.
The crux of the dispute lies in the company's remaining approximately $450 million. Currently, due to multiple lawsuits, including a shareholder class action, most of these funds have been frozen. TuSimple argues that it needs the freedom to transfer funds to China to commercialize its autonomous driving technology. However, some shareholders fear the funds might be misappropriated to support the private ventures of co-founder Chen Mo.
Meanwhile, TuSimple's operations in China have also undergone significant changes. The company's autonomous driving team has undergone massive layoffs, reducing its staff from 700 to 170. In contrast, the company has started actively recruiting employees with experience in video game development and animation, further affirming its shift in business direction.
This transformation has raised numerous questions. Some shareholders point out that Chen Mo might benefit from TuSimple's entry into the animation and gaming sector, as he is associated with several private animation and gaming companies. Additionally, the company's insufficient disclosure about its new business direction has caused dissatisfaction among shareholders.
TuSimple's dramatic shift comes at a time when foreign direct investment in China has hit a 12-month low, reflecting the challenges Chinese companies face in attracting external capital. At the same time, this case also highlights the complex situations multinational companies face amid geopolitical tensions.
As TuSimple tries to redefine its future, the company faces the daunting task of balancing shareholder interests, regulatory requirements, and business transformation. Regardless of the outcome, TuSimple's transformation will undoubtedly be a case closely watched by the tech industry and the investment community, potentially providing important insights for other companies facing similar challenges.
