The former founder of TuSimple is urging the courts to block the transfer of assets to China

Xiaodi Hou, founder and CEO of self-driving truck company TuSimple, has asked a California district court to issue a temporary injunction to stop the company from transferring its remaining US assets to China, according to a recent court filing.

Hou, who plans to apply for a temporary restraining order in December during the next court hearing, hopes to prevent TuSimple from moving tens of millions of dollars to China. As of September, TuSimple had a market capitalization of $450 million. Hou is also asking for the immediate availability of evidence to support his motion requests.

Hou’s declaration in court, filed on Monday, is the latest escalation in a battle between TuSimple and some of its shareholders, over the company’s efforts to use investors’ money to fund a new AI-powered animation and video game business in China.

It is the first time that Hou – who was ousted as CEO in 2022 – has publicly accused TuSimple and its leaders of advancing animation and game business assets owned by or with direct ties to Mo Chen, TuSimple’s founder and chairman of the board, under the guise of business pivot. Hou also argued that the company violated SEC rules by not notifying or obtaining approval from shareholders before changing its business model or transferring funds to China.

Hou now leads a new independent trucking startup in Texas

TuSimple, which was once valued at $8.5 billion after its 2021 IPO, ran into problems that led to its US shutdown and withdrawal in January 2024. The company’s stated goal was to sell its AV technology in China. But as the year progressed, TuSimple reduced its staff, stopped driving itself, and started hiring employees to handle tasks related to AI games and animation.

Shareholders sent a letter to the board in August after learning that TuSimple was putting resources into AI games and animation. The board responded a few weeks later by publicly announcing a new business unit.

Hou this week asked the court to issue a temporary restraining order after seeing TuSimple China’s filing showing that the company is about to withdraw money (or already has) from the United States. Two subsidiaries of TuSimple China last week registered an increase in assets worth $150 million, according to Hou’s announcement and information from public filings.

“These documents show a suspicious increase in registered assets between the two companies in less than one day as a precursor to a large amount of money transfers from the US to China,” the announcement read. “The most likely scenario is that these filings in China were preparatory steps before TuSimple US transferred funds to those subsidiaries in China.”

Hou added that such large transfers were “beyond the normal course of business” and compared to TuSimple China’s “heyday when it operated a large private truck fleet in Shanghai” and had about 700 salaried employees. As of September, TuSimple China had about 200 employees.

The window of opportunity for shareholders like Hou to get what they want — which is for TuSimple to liquidate so they can recoup some of their losses — is shrinking.

TuSimple is in a gray area when it comes to enforcement by the Securities and Exchange Commission. While TuSimple was delisted earlier this year, the company is still registered with the SEC and thus subject to US scrutiny. If the money goes to China, US shareholders will have no way to recoup their initial investment.

TechCrunch has reached out to the SEC to learn whether the agency is investigating TuSimple regarding shareholder complaints.

TuSimple did not immediately respond to TechCrunch’s request for comment.