Former TuSimple CEO Hou Scores Legal Victory Against Company
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A Texas Business Court judge rejected TuSimple’s request for a restraining order and injunctions against the onetime autonomous trucking pioneer’s founder and erstwhile CEO and his latest venture in the self-driving vehicle field.
Judge Sofia Adrogué of the 11th division of the Texas Business Court handed Xiaodi Hou another victory Dec. 28 in his legal battles across multiple U.S. jurisdictions with TuSimple and his former colleagues.
TuSimple in October alleged Hou misappropriated trade secrets related to its sensor suite and perception technology, decision-making technology and automatic safety technology.
Since filing the request in October, TuSimple rebranded as CreateAI. On Jan. 3 it said it would file an appeal of the decision and continue to pursue allegations of “trade secret misappropriation” against Hou and his Bot Auto venture, which emerged from stealth mode in September.
Houston-based Bot Auto aims to operate an autonomous truck fleet and offer Transportation-as-a-Service to freight customers.
(Bot Auto via LinkedIn)
The company will offer Level 4 autonomous vehicles. Autonomous vehicles are classified in Levels 1 to 5. Level 4 does not require human interaction in most circumstances, but a driver can still manually override systems.
“Bot Auto’s technology and successes are based on independently developed, new technology that harnesses the latest in [artificial intelligence], that was not even available when TuSimple was developing its now abandoned autonomous driving program. We are pleased that the court carefully considered the facts and the law and denied TuSimple’s request for an injunction,” Hou told Transport Topics in an email.
Hou, meantime, continues to focus energies on his legacy at TuSimple and the direction of existing funding and leadership at CreateAI, which intends to focus on martial arts and science fiction-based entertainment produced by its artificial intelligence technology.
On Dec. 13, Hou won a challenge to his former company’s board selections and governance changes. As a result, the Delaware Chancery Court will rule during the first quarter of 2025 on the fate of about $450 million in cash CreateAI has in its coffers, and decide who holds voting rights that will dictate decisions on the future of the company. Hou and current leadership are at odds over how the money should be allocated.
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Were the court to rule in Hou’s favor, TuSimple must conduct a special meeting of shareholders to vote on whether to undo any governance changes approved at a Dec. 20 annual meeting.
Hou has said that, if he wins, he will seek a vote to remove every director on CreateAI’s board except for Albert Schultz, the president of Kaerus Consulting, and then liquidate the company.
If Hou were to succeed in Delaware, he would become the company’s largest shareholder. He argues shareholders are being done a disservice by the CreateAI plan to invest funds intended for developing self-driving trucks for gaming and animation developments without their approval.
The late December ruling in Texas prompted Hou to also go on the offensive in Harris County, which encompasses Houston, as he and Bot Auto filed counterclaims with the business court.
On Dec. 30, Bot Auto alleged bad faith assertions of misappropriation and “tortious interference with prospective business relations.” It is seeking to recover its legal costs as well as “substantial” but unspecified damages tied to the bad faith claim under the Texas Uniform Trade Secrets Act, and a tortious interference judgment due to the “concerted effort” to damage the company’s business plans.
The counterclaim argues CreateAI timed the filing of its Texas requests specifically to damage Bot Auto’s fundraising efforts. It also bashed the intellectual property appropriation allegations of CreateAI, arguing there were “no useful secrets to misappropriate.”
“The sensor, decision-making, and safety technologies used by TuSimple are not compatible with, nor would they be useful to, the sensor, decision-making, and safety technologies used by Bot Auto,” it said.
(Bot Auto via YouTube)
Bot Auto also alleges CreateAI and executives including CEO Cheng Lu are waging a campaign to disparage and discredit the company and Hou.
Bot Auto raised $20 million in capital in September. A spokesman said in a Jan. 5 email that the company plans to raise more funding in the capital markets in the future, but would not be drawn on the timing.
A number of former TuSimple colleagues have joined Hou at Bot Auto. Lei Wang will be Bot Auto’s chief technology officer. Wang formerly headed TuSimple’s technology operations.
Paul Lam will be chief strategy officer. Work on the venture began in November 2023, according to a social media post by Lam.
TuSimple exited the U.S. autonomous trucking space in December 2023 after a series of layoffs and retrenchments.
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