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Elon Musk‘s lawyers will urge the Delaware Supreme Court on Wednesday to restore his $56 billion pay package from Tesla, as one of the biggest corporate legal battles enters its final stage nearly two years after a lower court judge rescinded the Tesla CEO’s record compensation. The outcome could have substantial consequences for the state of Delaware, its widely used corporate law, and its Court of Chancery, a once-favored venue for business disputes that has recently been accused of hostility towards powerful entrepreneurs. The January 2024 Court of Chancery ruling striking down Musk’s pay has become a rallying cry for Delaware critics. Chancellor Kathaleen McCormick ruled that the Tesla board lacked independence from Musk when it approved the pay package in 2018 and that shareholders lacked key information when they voted overwhelmingly in favor of it. As a result, she applied a demanding legal standard and found the pay unfair to investors. The defendants, current and former Tesla directors, denied wrongdoing and said McCormick misinterpreted the facts and the law. Musk is not expected to attend. Companies switch legal homes After the Musk pay ruling, large companies, including Tesla, Dropbox, and the venture capital firm Andreessen Horowitz, switched their legal homes to Texas or Nevada, where courts are friendlier toward directors. Delaware lawmakers responded to the corporate departures, a trend known as “Dexit,” by overhauling its corporate law. If Musk loses the appeal, he will still reap tens of billions of dollars in stock from the electric vehicle company, which agreed in August to a replacement deal if his 2018 plan is not restored. The company said the replacement award was meant to retain and focus Musk, who said earlier this year he was forming a new U.S. political party, on transitioning Tesla to robotics and automated driving. Tesla is now incorporated in Texas, where it is far more difficult for a shareholder to challenge board decisions. Tesla’s board last month proposed a $1 trillion compensation plan, highlighting confidence in Musk’s ability to steer the company in a new direction, even as Tesla loses ground to Chinese rivals in key markets amid softening EV demand. The five justices on Delaware’s high court will consider the appeal of the pay ruling as well as the $345 million legal fee that McCormick ordered Tesla to pay to the attorneys for Richard Tornetta, who held just nine Tesla shares when he sued to block the pay deal. The court typically takes months to rule. Tesla estimated in 2018 that the stock options plan would be worth $56 billion if the company met operational and financial goals, which it did. Because the stock continued to appreciate, the options are currently worth closer to $120 billion, by far the largest executive compensation ever. Musk is the world’s richest person with a fortune of around $480 billion, according to Forbes. The defendants have argued that McCormick erred in finding social and business ties to Musk compromised their independence and said Tesla shareholders were informed of the economic terms of the pay deal before they approved the plan. The directors said she should have reviewed the pay package under the “business judgment” standard, which protects directors from second-guessing by courts. The directors have long argued the pay package performed as hoped – it focused the attention of Musk, a serial entrepreneur, and he transformed Tesla from a startup into one of the world’s most valuable companies. Several months after McCormick’s ruling, Tesla received shareholder approval a second time for the plan, which McCormick rejected as legally invalid. Tesla is also appealing that decision. Tom Hals, Reuters
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E-Commerce
A startling message came over the radio from an air traffic control tower near Los Angeles less than a week into the federal government shutdown: “The tower is closed due to staffing.”Without enough air traffic controllers to guide planes into and out of Hollywood Burbank Airport, the tower went dark for almost six hours on Oct. 6, leaving pilots to coordinate their movements among themselves. Flight delays averaged two-and-a-half hours in one of the first visible signs that the shutdown was already taking a toll on the nation’s aviation system.Since the shutdown began Oct. 1, the Federal Aviation Administration has reported controller shortages in cities across the U.S., from airports in Boston and Philadelphia, to control centers in Atlanta and Houston. Flight delays have spread to airports in Nashville, Dallas, Newark and more.And already there has been an increase in unscheduled absences among security screeners at some airports. The union representing Transportation Security Administration employees says the absences haven’t yet caused major disruptions, but it warned longer lines at security checkpoints could soon become a reality after workers received their final paychecks over the weekend.Experts and union leaders say the disruptions are a stark reminder that the aviation system is already stretched too thin by chronic understaffing and outdated technology. They warn the cracks in the system could rapidly deepen the longer the shutdown drags on and critical aviation workers are without their regular paychecks.“It’s like having a drought the year after you had a drought,” Greg Raiff, CEO of Elevate Aviation Group, told The Associated Press. Problems have persisted for years These concerns aren’t new. In 2019, the aviation system buckled under the weight of a 35-day government shutdown the longest in U.S. history during President Donald Trump’s first term.Around the three-week mark, air traffic controllers, many of them working up to 60 hours a week, sued the government over their missed paychecks. One terminal at the Miami International Airport was forced to close because security screeners were calling out sick in large numbers. Some even quit altogether.“Here we are so many years later, and the problems have not been addressed,” said aviation attorney Ricardo Martinez-Cid, a Florida Bar-certified expert on aviation law who regularly represents crash victims. “Now we’re in a worse position when we had been put on notice. We had the opportunity to address it.”Since then, the country has faced repeated warnings. In January, a mid-air crash over the Potomac River involving a commercial jet and a military helicopter killed 67 people. A series of equipment failures and radar outages this year also highlighted the need for upgrades. Controller shortage at a ‘critical’ point Before the latest shutdown, both the FAA and TSA were already dealing with staffing shortages. That includes a shortage of about 3,000 air traffic controllers.Nick Daniels, president of the National Air Traffic Controllers Association, has said staffing levels have reached a “critical” point, the lowest in decades. The shortage is so severe that even a few air traffic controllers missing work can disrupt operations at already understaffed facilities.“And on top of that,” he said, “they’re working with unreliable equipment.”The shutdown began just as the FAA was starting to make some progress on addressing the shortage of controllers and modernizing the outdated equipment they rely on that keeps disrupting flights when it malfunctions.The agency says it topped its goal of hiring 2,000 controllers this year after streamlining the application process at its academy in Oklahoma City, but it will take years still to eliminate the shortage. And it had just begun looking for companies to help oversee a $12.5 billion effort to overhaul its aging and complex technology systems.Now, the shutdown is delaying those long-needed efforts. And union leaders say the staffing shortages may be worse by the time the government reopens. Shutdown could increase gaps in staffing Johnny Jones, secretary-treasurer of the American Federation of Government Employees chapter representing TSA workers, expressed concern that the shutdown could drive even more security screeners to leave the agency, especially given the uncertainty that the workers already have faced this year. That includes the Trump administration’s attempts to revoke their collective bargaining rights.Daniels, meanwhile, warned it could stoke fear among newer controllers and trainees who might reconsider the career entirely to avoid working in future shutdowns.It’s a long-standing concern. In 2019, after the 35-day shutdown ended, a congressional committee hearing dug into the impacts on air travel.“All of these air traffic controllers and aviation safety professionals were used as pawns in a political fight that had nothing to do with aviation. This is wrong and must not be allowed to happen again,” warned the union leader representing air traffic controllers at the time.At the hearing, there were also bipartisan calls for reform to keep the FAA funded “without interruption, even when the rest of the government shuts down,” as one lawmaker put it. Stories were shared of controllers and TSA agents taking on extra jobs to pay rent, mortgage and other bills despite working longer shifts to fill the gaps in staffing.Lawmakers and industry officials who testified agreed: The shutdown made the aviation system less safe.“We implore all involved, please heed not only our warnings but the entire stakeholder community’s warnings. This vicious budgetary cycle of stops and starts with little to no stability or predictably has simply got to stop,” said Nick Calio, then-president and CEO of Airlines for America, an industry trade group representing airlines including Delta, United and Southwest.And yet the system remains vulnerable to shutdowns seven years later, Martinez-Cid said.“We’re long overdue for a wake-up call.” Associated Press transportation reporter Josh Funk contributed to this report. Rio Yamat, AP Airlines and Travel Reporter
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E-Commerce
OpenAI unleashed Sora 2 last month, the final boss of slop machines (at least for now). The social app draws entirely from artificial intelligence: Instead of sharing photos and videos of themselves, users can opt in for cameos and create fake clips that depict themselves or their friends in any scenario imaginable. It’s mostly being used to make viral meme content and the type of short-form videos you’d scroll past on TikTok, albeit with deepfakes. Sora doesn’t allow you to make videos of other living people (dead celebrities and SpongeBob SquarePants characters are fair game) unless given express permission. As one user put it: Digital Taxidermy is the craziest yet most accurate description of the AI slop videos of people who’ve passed away. OpenAI in 2021: ‘we want to cure brain cancer,’ another X post read, responding to the announcement. OpenAI in 2025: ‘were becoming brain cancer.’ Upon the apps release, one of the first breakout stars was none other than CEO Sam Altman. You either die a hero or build Sora 2 and become meme material, an X post read with an AI generated Altman posing as a K-pop star, wearing a crop top and dark nail varnish. Another X user used Sora to make an AI video of Altman wearing baggy clothes and outfit and thick gold chains, rapping about his company’s success. Sam Altman dressed like a 2000s rapper is rapping about how Sora is bankrupting all other AI video companies, ending every line with what happened to that boy, brrr, they posted. Responding to the influx of memes, Altman wrote on X, it is way less strange to watch a feed full of memes of yourself than I thought it would be. Not sure what to make of this. In another popular Sora 2 deepfake, Altman is busted stealing GPUs from Target. Luiza Jarovsky wrote: It is AS IF they are encouraging people to create fake videos of people committing crimes, being humiliated, or in all sorts of embarrassing situations. She added. The AI-powered ‘deepfakezation’ of the internet is here and it will not be beautiful. Just days after launch, journalist Taylor Lorenz also announced that a psychotic stalker was already using Sora 2 to make deepfake videos of her. It is scary to think what AI is doing to feed my stalkers delusions, Lorenz wrote. Others however, are embracing the slop life. Bob Ross vibe coding was the AI slop I never knew I needed in my life, one post read. Another big meme on Sora is making it appear as if Jake Paul is coming out the closet or give makeup tutorials. Paul himself appears to be in on the joke. Ive had it with the AI stuff, he said in a Wednesday video. Its affecting my relationships, businesses. Its really affecting things, and people really need to get a life, he added, all the while dabbing foundation on his face.
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