TuSimple, a leading developer of self-driving truck systems, fired CEO and founder Xiaodi Hou, the architect of the technology, following a report that he was being investigated for his role in improperly financing and transferring technology to a Chinese startup. Hou denies any wrongdoing.
TuSimple shares fell 50% on the news.
The company, which also ousted Hou as chairman late on Sunday, said the moves were made in connection with an ongoing investigation led by the board, which determined “a change of chief executive is necessary.” San Diego-based TuSimple named Chief Operating Officer Ersin Yumer as interim CEO. Board member Brad Buss was appointed as the new chairman.
Hou’s ouster came shortly after the Wall Street Journal reported that the Federal Bureau of Investigation, the Securities and Exchange Commission and the Committee on Foreign Investment in the United States, known as CFIUS, were all investigating TuSimple’s ties to Hydron Inc., a hydrogen transportation company founded by founder Mo Chen TuSimple, citing people familiar with the matter. The concern is that executives, including Hou, did not properly disclose the relationship with Hydron, a potential breach of fiduciary duties and securities laws, according to the people, who spoke on condition of anonymity. Investigators are also looking into whether TuSimple shared its U.S. self-driving technology with Hydron, a company with Chinese operations, a possible violation of U.S. regulations, the report said.
TuSimple did not refer to the report in its statement, but Hou denied it in a LinkedIn post on Monday.
“I have been completely transparent both in my professional and personal life and I fully cooperated with the board because I have nothing to hide,” he said. “I want to make it clear that I fundamentally deny any suggestion of wrongdoing.
The Caltech-trained computer scientist created TuSimple with Chen in 2015 with the goal of perfecting autonomous driving for heavy trucks rather than robotic driving. Given the somewhat easier operating environment experienced by semis – highways rather than crowded urban streets – and the persistent shortage of long-haul drivers, Hou believed it would be a faster route to market. Companies including Alphabet’s Waymo, Aurora, Embark and Kodiak are also racing to bring robotic trucks to market in the coming years.
(For more information on Hou and TuSimple, see, Robo-Rigs: The Scientist, the Unicorn, and the $700 Billion Race to Build Self-Driving Semi-Trucks)
Hou’s departure comes as the outlook for self-driving companies tightens as the push to make autonomous vehicles operate safely without a human behind the wheel is increasingly seen as a costly, long-term challenge. Last week, Ford and Volkswagen decided to stop funding Argo AI, a promising autonomous technology company that had raised more than $3 billion after deciding that it would take too many years to see a return on that investment.
“My motivation has always been and continues to be to pursue this visionary dream,” Hou wrote today. “The painful truth is that on October 30, the board agreed to remove me as CEO and chairman without cause. Unfortunately, the board’s process and results have been questionable at best. As the facts come to light, I am confident that my decisions as CEO and Chairman, and our vision for TuSimple, will be true.”
TuSimple shares fell 45% to $3.49 in afternoon Nasdaq trading.