TuSimple co-founder resigns, accused of poaching staff for new venture

TuSimple’s co-founder, Xiaodi Hou, resigned from the company’s board of directors last week amid an internal investigation which sought to verify claims that Hou approached TuSimple employees about leaving the company to join his new venture, per an SEC filing.

Sources familiar with the matter told TechCrunch a “whistleblower” informed upper management about Hou’s solicitations of employees over the past few months to join a company he was starting. Hou had allegedly been pressuring certain employees to stop working so hard, either because they would soon join his new venture or because he wanted to see the autonomous trucking company fail without him, the sources say.

TuSimple began an internal investigation, during which it confirmed at least two employees — top talent in “high tech” teams — had been approached by Hou, but the co-founder resigned from the board before TuSimple could conclude the investigation.

TuSimple has not decided whether to move forward with the investigation, but if it does, it will be to determine if any other employees had been compromised, according to a source familiar with the matter.

Headshot of Xiaodi Hou, co-founder of TuSimple. Image Credit: TuSimple

Hou did not respond to TechCrunch’s requests for comment, but the co-founder could certainly be accused of having an axe to grind. In November, TuSimple’s board fired Hou from his CEO, president and CTO posts following the board’s discovery that TuSimple had transferred confidential information to Hydron, a hydrogen-powered trucking startup led by TuSimple co-founder and controlling shareholder Mo Chen and backed by Chinese investors.

At the time, Hou said he was removed “without cause,” and called the board’s processes and conclusions “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 vindicated,” Hou said in a LinkedIn post in November.

TuSimple’s board had conducted its own investigation in response to a probe from the Committee on Foreign Investment in the U.S. (CFIUS). CFIUS reviews foreign investments for national security concerns and can impose safeguards and recommend that the president block certain investments. The Biden administration is actively working to prevent U.S. technology from advancing China’s military power, including the use of autonomous vehicles.

That investigation is still ongoing, and it has prompted potential criminal charges. Last month, representatives who are part of the CFIUS review panel urged the Justice Department to consider economic-espionage charges against Hou and Chen, as well as current CEO Cheng Lu.

Lu previously served as TuSimple’s CEO from September 2020 to March 2022 before he was ousted. He returned to the helm in November. At the same time, four independent directors were removed from the board, and Chen was appointed executive chairman of the board.

While TuSimple likely hopes Hou’s resignation will help the company close the chapter on national security investigations, TuSimple has other concerns on its plate. Earlier this month, the company received a non-compliance warning from the Nasdaq for failing to file its fourth quarter and full year 2022 financial results in time. TuSimple is still bringing on a new auditor after KPMG resigned due to the company’s risk factor, sources say. The company hopes to report earnings by May, which is the deadline the Nasdaq provided to regain compliance.