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A federal judge ruled yesterday that Tesla must face a lawsuit alleging that it committed fraud by misrepresenting the self-driving capabilities of its vehicles.

California resident Thomas LoSavio's lawsuit points to claims made by Tesla and CEO Elon Musk starting in October 2016, a few months before LoSavio bought a 2017 Tesla Model S with "Enhanced Autopilot" and "Full Self-Driving Capability." US District Judge Rita Lin in the Northern District of California dismissed some of LoSavio's claims but ruled that the lawsuit can move forward on allegations of fraud:

The remaining claims, which arise out of Tesla's alleged fraud and related negligence, may go forward to the extent they are based on two alleged representations: (1) representations that Tesla vehicles have the hardware needed for full self-driving capability and, (2) representations that a Tesla car would be able to drive itself cross-country in the coming year. While the Rule 9(b) pleading requirements are less stringent here, where Tesla allegedly engaged in a systematic pattern of fraud over a long period of time, LoSavio alleges, plausibly and with sufficient detail, that he relied on these representations before buying his car.

Tesla previously won a significant ruling in the case when a different judge upheld the carmaker's arbitration agreement and ruled that four plaintiffs would have to go to arbitration. But LoSavio had opted out of the arbitration agreement and was given the option of filing an amended complaint.

Enlarge / A Waymo self-driving car in downtown San Francisco on Bush and Sansome Streets as it drives and transports passengers. (credit: JasonDoiy | iStock Unreleased)

Crashing into parked cars, drifting over into oncoming traffic, intruding into construction zones—all this "unexpected behavior" from Waymo's self-driving vehicles may be violating traffic laws, the US National Highway Traffic Safety Administration (NHTSA) said Monday.

To better understand Waymo's potential safety risks, NHTSA's Office of Defects Investigation (ODI) is now looking into 22 incident reports involving cars equipped with Waymo’s fifth-generation automated driving system. Seventeen incidents involved collisions, but none involved injuries.

Some of the reports came directly from Waymo, while others "were identified based on publicly available reports," NHTSA said. The reports document single-party crashes into "stationary and semi-stationary objects such as gates and chains" as well as instances in which Waymo cars "appeared to disobey traffic safety control devices."

Enlarge (credit: Aurich Lawson | Tesla | Airplane!)

There's more bad news for Tesla. On Monday, we learned that CEO Elon Musk is continuing to slash his way through the company payroll as Tesla went through a fourth round of layoffs in four weeks. Yesterday, we discovered exactly what questions the National Highway Traffic Safety Administration wants answered about the safety of Tesla's Autopilot driver assist. And today, it emerged that the US Department of Justice is investigating whether or not Tesla committed securities or wire fraud by making misleading statements about Autopilot and its so-called "Full Self-Driving" (FSD) option.

Reuters reported that three people familiar with the matter told it about the investigation. One of the sources also told Reuters that the Securities and Exchange Commission is also investigating Tesla's claims about its driver assists.

Not the first time

This isn't the first time Tesla has been accused of securities fraud. In 2018, Musk agreed to a settlement with the SEC over his infamous "funding secured" tweet that sent the company's share price skyrocketing despite the fact that there was never actually a possibility that he would take the company private. As a result, Musk was required to step down as chairman, and both Musk and Tesla were ordered to pay $20 million in penalties, to be distributed to investors who lost money after being misled by Musk.

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On Sunday night, even more Tesla workers learned they were no longer employed by the company as it engaged in yet another round of layoffs. Multiple former employees posted on LinkedIn and other sites to relay the news that they were no longer with the company.

"Well, tonight I have learned that my nearly 8 year journey leading and designing Service products at Tesla has come to an end," wrote one former employee.

"For the past Month, most Tesla Employees have had the ritual of keeping a close eye on one's personal email on Sundays and to check it before heading into work on Monday, as layoffs have been increasing. I was spared last October when we had layoffs and also for the last 3 weeks of layoffs. However, I too received the dreaded 'Tesla Employment Update' email today," wrote another.

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On Thursday, renowned AI researcher Andrej Karpathy, formerly of OpenAI and Tesla, tweeted a lighthearted proposal that large language models (LLMs) like the one that runs ChatGPT could one day be modified to operate in or be transmitted to space, potentially to communicate with extraterrestrial life. He said the idea was "just for fun," but with his influential profile in the field, the idea may inspire others in the future.

Karpathy's bona fides in AI almost speak for themselves, receiving a PhD from Stanford under computer scientist Dr. Fei-Fei Li in 2015. He then became one of the founding members of OpenAI as a research scientist, then served as senior director of AI at Tesla between 2017 and 2022. In 2023, Karpathy rejoined OpenAI for a year, leaving this past February. He's posted several highly regarded tutorials covering AI concepts on YouTube, and whenever he talks about AI, people listen.

Most recently, Karpathy has been working on a project called "llm.c" that implements the training process for OpenAI's 2019 GPT-2 LLM in pure C, dramatically speeding up the process and demonstrating that working with LLMs doesn't necessarily require complex development environments. The project's streamlined approach and concise codebase sparked Karpathy's imagination.

Enlarge (credit: Aurich Lawson | Getty Images | Beata Zawrzel)

No car company in recent years has been able to generate more news headlines than Tesla. Its original founders were among the very first to realize that lithium-ion laptop cells were just about good enough to power a car, assuming you put enough of them in a pack, and with critical funding from current CEO Elon Musk, the company was able to kick-start an electric vehicle revolution. But those headlines of late have been painting a picture of a company in chaos. Sales are down, the cars are barely profitable, and now the CEO is culling vast swaths of the company. Just what is going on?

Tesla had some good times

Always erratic, Musk's leadership has nevertheless seen the company sell electric cars in volume, profitably. What's more, Musk has at times been able to inspire faith in and devotion to his company's products in a way that makes the late Steve Jobs look like a neophyte—after the Model 3 debuted in 2016, 450,000 people gave $1,000 deposits to Tesla for a product that wouldn't go into production for at least 18 months.

Of course, that example also illustrates a long-running concern with the company and Musk's investment-attracting pitches: overhyping and underdelivering. By 2018, more than one in five reservation holders wanted a refund after cheaper models were delayed and delayed.