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"recently, there have been a large number of false remarks and reports, which have had a great impact on tusimple."

after several years, tucson's top management team showed up for the first time, including chen mo, lu cheng, and hao jianan, who are the chairman, ceo, and ceo of china, respectively. they are also the "only remaining" leadership team of tucson.

since the beginning of this year, the former first driverless car stock has revealed a series of trends:

in february, it lost all domestic autonomous driving partners;

in march, it was revealed that it had stopped all r&d and commercialization activities;

in may, former cto and co-founder of the company, wang naiyan, resigned and joined xiaomi auto. tusimple also reached a settlement agreement with north american regulators at this time.

in august, tucson announced that it would switch to the aigc film and television animation track;

in september, an anonymous shareholder complaint was leaked, pointing out that the current leadership has been "weaving a huge lie";

and in the coming november, hou xiaodi regained the voting rights of the equity - it was previously revealed that he reached a voting rights agreement with chen mo in order to dissolve the board of directors.

in response to all this, tucson’s top management publicly responded for the first time. smart car reference was at the communication site and sent the following information as soon as possible.

(the following is a transcript of the latest communication between tucson management, edited only for necessary background and reading fluency.)

"hou xiaodi believes in unmanned operations, and i believe in cash flow"

question 1: what is your relationship with hou xiaodi?

chen mo:

first of all, when hou xiaodi was fired by the previous board of directors (october 2022), i really didn't know what happened. we didn't contact each other for a long time before he was fired. he called me the day before he was fired and said that he hoped i could help him get rid of these directors first. when i was still thinking about it (the next day), i saw that he was fired.

i didn't say whether i agreed or not, but some investors and shareholders wanted me to go back. at that time, i made two requests: one was to ask lu cheng to go back with me, and the other was to ask him to authorize me to vote. because if i didn't have absolute power at that time, i couldn't clean up the mess.

my judgment at the time was that the us side couldn't do it anymore, and the annual cost of more than 300 million yuan had to be cut quickly to survive. but hou xiaodi and i never communicated on this point.

i don't know why hou xiaodi was fired by the board of directors at that time, and i still don't know to this day. why did he resign to start a new company? to be honest, i don't know either. i just said that objectively he resigned and started a new company. i guess it was because we decided to lay off all tucson usa employees.

of course, try to sell it first. if you can’t sell it, you can only reduce the cost.

hou xiaodi may think that driverless cars are the only way, but i think the company’s cash flow is the only way. what i have to do is to balance the company’s revenue as soon as possible.

question 2: why didn’t you communicate directly with hou xiaodi for two years?

chen mo:

he set up a new company very early (december 2022) to compete directly with tucson. isn't this directly harming the interests of tucson shareholders? so how do you communicate?

question 3: what is the essence of hou xiaodi’s style of doing things?

chen mo:

everyone has different beliefs. my personal belief is fiduciary responsibility. only real money and real profit can make a difference. telling stories is useless. everyone has different choices, and i don't think that's a big deal.

lu cheng:

this is not about idealism, realism, or technical and business schools. this is all nonsense. just look at the facts: chen mo and i left in march 2022; the cfo left in may; the legal director left in july. then hou xiaodi was fired by the board of directors. this is a very abnormal thing - no matter what school you believe in.

second, after chen mo and i came back, he was willing to let us take over, but he founded a company that directly competed with tucson in such a short period of time. this was very irresponsible to tucson shareholders - this has nothing to do with faith, it is a question of professional ethics.

question 4: tucson will hold a shareholders' meeting at the end of december. is it possible for hou xiaodi to take back tucson?

chen mo:

hou xiaodi and i each own 12 million class b shares (with the same voting weights), which is the same.

the voting rights authorized by hou xiaodi to me will expire in november this year. our opinions are obviously at odds, so the rest depends on how the class a shareholders vote.

question 5: some reports say that hou xiaodi was the one who “squeezed out” chen mo in march 2022? is that true?

chen mo: at that time, hou xiaodi told me that i could only choose one of the two, so out of consideration for hou xiaodi's technical leadership, i went to persuade lu cheng to leave the company.

soon, hou xiaodi told me that the chief independent director brad suggested that i should resign as chairman and leave the board to concentrate on running turing smart card, so as to better cooperate with tucson in the future. i accepted the suggestion.

however, i never had any direct communication with independent director brad from beginning to end.

question 6: regarding the settlement agreement with the united states, what mistakes did tucson make and why did it cost so much to settle?

chen mo: as for geopolitics, the united states has its own issues and china has its own issues.

how does tucson respond to anonymous shareholder complaints?

the anonymous letter from shareholders mainly targeted tucson's behavior before it officially announced its transition to aigc, accusing chen mo and others of using tucson's funds and resources to engage in film, television, and gaming businesses long before, deceiving shareholders.

tusimple proactively responded to the allegations and explained the current status and future plans of its autonomous driving business.

1) regarding the shareholders' accusation that the two newly established companies have nothing to do with the autonomous driving business and are related to chen mo's personal company:

chen mo: because foreign companies cannot directly conduct internet business in china, everyone will connect to this company through the vie method.

in fact, it is a company controlled by tusimple group's vie. all companies including alibaba and tencent use this method.

regarding other related companies, ink rogue is my personal company, which is based on my hobbies for animation and games. there is no financial transaction, no business transaction, and no relationship between this company and tucson to date.

there was overlap in the registered contact information, because you have to fill in an address when registering a company in china. at that time, i only used the tucson address, and there was no overlap in personnel.

2) tusimple’s management lied, claiming that tusimple’s autonomous driving business in china was in full swing and urgently needed a lot of funds, but never disclosed that the company was quietly turning to video game and animation production.

chen mo:

in february 2024, the tro injunction (prohibiting cooperation with chinese companies) issued by the southern california court had a huge impact on tusimple's china autonomous driving business and caused a large number of core technology r&d teams to leave. in order to ensure road testing safety, we gradually reduced autonomous driving r&d and testing work.

in march 2024, in view of the challenges and difficulties faced in the field of autonomous driving, tusimple's senior management team began preliminary exploration work related to generative ai applications and actively communicated and discussed with the board of directors; after several months of preliminary exploration, management believed that there were huge commercialization opportunities in the aigc field.

therefore, in accordance with the company's articles of association and governance system, tucson group held a board meeting on august 12, 2024, and formally approved the establishment of a new business direction of generative ai, officially entering the animation film and game industry. on august 15, the company officially announced the relevant ip authorization and cooperation with three-body universe.

the company's management and ceo did not engage in any deception of the board of directors, the public, or the u.s. federal courts, nor did they intentionally transfer funds to china. tucson group funds were not used for chen mo's personal investments in video games and animation.

hao jianan:

currently, tusimple's technical team has about 200 people, and is still the core team that worked on autonomous driving. after switching to aigc, it can continue to maintain its advantages.

in addition, after tusimple suspended its autonomous driving-related operations, the cost of aws cloud services did not decrease, because this was an annual framework contract signed with aws during hou xiaodi's tenure, which included minimum consumption requirements and related resources could be used for subsequent generative ai-related businesses.

3) are you still doing the autonomous driving business?

chen mo:

in the future, tucson's autonomous driving business will shift to patent licensing, which means opening up tucson's existing technology patents and data protocols to other business partners for use and earning licensing fees.

we have already contacted two automobile company clients, and the scale of cooperation is expected to be in the tens of millions of us dollars.

tucson joins aigc, what do you think?

lu cheng:

the premise behind tucson's entry into aigc is actually quite normal, as executives must constantly look for more business opportunities.

there are several specific logics. first, generative ai is a very hot topic. tucson began to communicate with shareholders and the board of directors in march, and shareholders and the board of directors also agreed to explore this industry first.

content and games are a very large market, with global revenue of approximately us$600 billion.

second, by studying the process of game and animation production, we feel that aigc can create great value in this area.

third, from a technical perspective, tucson has been working on driverless technology for many years and has accumulated a lot of ai technology and facilities, as well as a lot of large models, so there is a great potential for sharing technology.

fourth, we also have experience in management. before tucson, chen mo had been working in the gaming industry for many years and had extensive experience.

tucson's strategy for aigc is relatively simple, which is to cooperate with well-known large ips to create global high-quality content and games.

for example, for the officially announced "the three-body" ip project, we use ai technology to reduce costs and speed up processes, making the content higher quality and launching faster.

the above is the logic behind tucson’s entry into the aigc industry.