Techin' Geek

The Securities and Exchange Commission has concluded its inquiry into electric vehicle startup Faraday Future, even though SEC personnel involved in the matter had suggested an enforcement action last year, according to TechCrunch.

Four individuals knowledgeable about the investigation, who requested anonymity to discuss the government matter, informed TechCrunch that the SEC communicated the case’s closure to the company and those implicated in the review this past week.

The case’s dismissal occurs amid a historic decline in the SEC’s enforcement actions, with only four cases initiated against publicly traded firms in its 2025 fiscal year, a recent report indicates. The SEC did not reply to a request for comments submitted after business hours.

The inquiry into Faraday Future spanned almost four years. The SEC was assessing whether the EV startup provided “false and misleading statements” during its 2021 public listing via a merger with a special purpose acquisition company (SPAC) and whether the company misrepresented the sales of its initial electric vehicles in 2023 — allegations made by at least three former employee whistleblowers.

The financial regulator issued several subpoenas to the startup, as documented in regulatory filings from Faraday Future. Additionally, the SEC conducted depositions of multiple former staff and executives in 2024 and 2025, three individuals informed TechCrunch.

In July 2025, Faraday Future disclosed that the SEC had sent the company and several executives — including founder Jia Yueting — letters termed “Wells Notices.” The SEC issues Wells Notices when its staff has opted to recommend enforcement action to the agency.

“We can redirect all our focus towards executing our strategy. Over the last five years, we devoted considerable time, effort, and resources to cooperating with the investigation,” Jia stated in a release on Sunday. Faraday Future indicated that the SEC had informed the company it would not pursue action against any of its executives, either.

It remains unclear if Faraday Future ever addressed the Wells Notices sent the previous year. As recently as February, the company revealed in regulatory filings that it had not. “The Company and executives intend to engage with the SEC to clarify why enforcement action should not be pursued,” Faraday Future communicated in a filing last month.

The Department of Justice also issued requests for information to Faraday Future following the SEC’s initiation of its inquiry in 2022. Faraday Future has characterized this as an “investigation” in regulatory filings; the DOJ has never confirmed whether it commenced a full investigation and did not respond to an after-hours request for comment.

It is uncommon for the SEC to avoid pursuing enforcement action after sending a Wells Notice. A study conducted at the Wharton School in 2020 indicated that approximately 85% of targets receiving a Wells Notice ultimately face court proceedings with the SEC.

The SEC scrutinized nearly every electric vehicle startup that went public in a SPAC merger throughout the past six years. In nearly all instances, the agency reached settlements with the startups. It dismissed an investigation involving Lucid Motors in 2023, and as reported by TechCrunch in February, the SEC concluded a probe into the bankrupt EV startup Fisker late last year.

Origins of the investigation

Faraday Future was established in California in 2014 by Jia, a businessman who was then managing a flourishing tech conglomerate in China called LeEco. It was one of numerous nascent companies attempting to become the “next Tesla” or, in an optimistic view, a “Tesla killer.”

Faraday attracted talent from Tesla, various automakers, and tech companies like Apple, and at one time employed approximately 1,400 workers. However, challenges arose swiftly. The company garnered attention, both positive and negative, at the 2016 Consumer Electronics Show with a spectacular concept vehicle and the ambitious aim of being as revolutionary as the iPhone.

The company showcased its inaugural vehicle the following year: a high-end electric SUV named the FF91. By the close of 2017, however, the company was nearly out of funds and had laid off or furloughed hundreds of employees. Jia’s company in China collapsed, and he self-exiled to California as the government in his homeland placed him on a debtor blacklist. (During this period, a close business associate of Jeffrey Epstein attempted to solicit investment in Faraday Future and other EV startups, as revealed by TechCrunch. Epstein ultimately did not invest.)

Faraday Future was salvaged by an investment from the major Chinese real estate conglomerate Evergrande. However, that partnership disintegrated swiftly as well, with Evergrande withdrawing by late 2018 and Faraday Future reducing its workforce even further.

Jia nominally resigned as CEO in 2019 and also sought personal bankruptcy protection to resolve billions of dollars of debt from LeEco that he had personally guaranteed. Nevertheless, behind the scenes, he remained largely in control of the company.

This became problematic when Faraday Future went public in 2021 and raised around $1 billion. Members of the newly formed public company board believed that Faraday’s executives had misrepresented Jia’s level of control over daily operations — particularly after a short seller report scrutinized Faraday Future — prompting them to establish a special committee to investigate.

The committee hired an external law firm and a forensic accounting firm and, within the first few months, began delivering its findings directly to the SEC, as three sources familiar with the investigation relayed to TechCrunch.

Between January and April 2022, Jia was sidelined due to the board’s investigation, a senior VP named Matthias Aydt (currently co-CEO with Jia) was placed on probation for six months, and another VP named Jerry Wang (Jia’s nephew) was suspended. (Wang eventually resigned due to a “failure to cooperate with the investigation,” per company filings, but has since returned to Faraday Future.)

The committee’s efforts also revealed that Faraday Future had, in the two years leading up to its public listing, partially survived through multi-million-dollar loans provided to the company by low-level employees connected to Jia — referred to as “related party transactions” in legal terms.

On March 31, 2022, Faraday Future announced that the SEC had initiated its probe. The startup disclosed the DOJ’s requests for information in June.

Dodging another bullet

Throughout the remainder of 2022, amid the initial phases of the SEC investigation, employees and individuals close to Jia organized a campaign to reclaim control of the board and his company. This ultimately led to death threats directed at some directors, who eventually resigned, allowing those close to Jia to once again manage the company.

Faraday Future finally began delivering the first few FF91 SUVs in early 2023. Former employees have filed lawsuits against the company, alleging these were not genuine sales and that the company deceived investors. The SEC investigators handling the case issued subpoenas to Faraday Future regarding concerns related to these sales, as filings indicate.

Former executives and employees were initially deposed by the SEC in 2024, according to sources familiar with the investigation. The SEC conducted longer depositions with some of them in the first half of 2025, the sources indicated.

The Wells Notice delivered in July 2025 indicated SEC staff had made “a preliminary determination to recommend that the Commission file an enforcement action against the Company alleging violations of various anti-fraud provisions of the federal securities laws.”

Specifically, the Wells Notice mentioned “purported false or misleading statements” made during the SPAC merger process regarding “related party transactions” and Jia’s “role in the Company.” Jia, his nephew Wang, and two other unnamed employees also received Wells Notices.

Faraday Future is still attempting to sell the FF91, but it has also recently adapted its business in several ways. The company is importing more affordable hybrid and electric vans from China. It seems to be selling rebranded versions of Chinese robots and transformed a publicly traded biotechnology company into one focused on cryptocurrency.

These efforts have not alleviated the company’s challenges. On Friday, the company announced it had received a warning from Nasdaq indicating its stock price had fallen below the minimum of $1, which could eventually result in the company being delisted.

This story has been updated with a statement from Faraday Future.

Nvidia’s GTC event showcased a plethora of highlights: sales forecasts soaring into the trillions, groundbreaking graphics tech capable of transforming video game aesthetics, bold claims that every business ought to implement an OpenClaw strategy, and even a robotic rendition of the cherished snowman Olaf from Disney’s “Frozen.”

In the latest episode of TechCrunch’s Equity podcast, TechCrunch’s Kirsten Korosec, Sean O’Kane, and I discussed CEO Jensen Huang’s keynote and explored its implications for Nvidia’s prospects. Additionally, a significant portion of our talk centered on poor Olaf, whose microphone had to be muted when he began going off-topic.

Even if the demonstration had gone without a hitch, Sean may still have expressed some concerns, as he pointed out these presentations typically concentrate on “the engineering challenges” rather than the “truly complex gray areas” socially.

“What if a kid kicks Olaf over?” Sean wondered. “And every other child witnessing Olaf being toppled has their entire Disney experience spoiled, damaging the brand?”

Here’s a preview of our dialogue, condensed for brevity and clarity, below.

Anthony: [CEO Jensen Huang] essentially stated that it’s imperative for every business to have an OpenClaw strategy now. I view that as an exceedingly grand statement meant to capture attention; it’s fascinating considering the current pivotal moment for OpenClaw. 

The founder has transitioned to OpenAI. Thus, it is now an open-source initiative that could potentially thrive and evolve independently of its originator, or it could stagnate. If companies like Nvidia are heavily investing into it, then it’s more likely to continue developing. However, it will be intriguing to see a year from now whether that statement proves to be insightful or if people are saying, “Open what?”

Kirsten: For Nvidia, it costs them virtually nothing in the larger context to initiate what they refer to as NemoClaw, an open-source endeavor they developed with the OpenClaw originator. Yet, if they fail to act, they stand to lose a lot. Hence, my interpretation of Jensen’s remark that “Every enterprise needs to have an OpenClaw strategy” is that “Nvidia must devise a solution or strategy for businesses, as if it succeeds, it opens another avenue for Nvidia to align with numerous other firms.” Therefore, the risk of inaction is far greater than attempting something that may not lead anywhere.

Sean: The fundamental inquiry here is why we haven’t discussed what is evidently the ultimate goal for Nvidia, which could make it the first $100 trillion entity: a robot Olaf.

Anthony: How could I overlook that?

Kirsten: Anthony, just fast forward to the conclusion of the two and a half hours to catch this.

Thus, the Olaf robot makes its appearance, a signature move for Jensen, who revels in these demonstrations, which can vary in success. It also serves to showcase Nvidia’s innovation in robotics; I’m unsure if Olaf was genuinely speaking in real-time or if it was pre-programmed — it felt a touch pre-set, featuring specific trigger words.

However, the most entertaining aspect was that they had to mute its mic because it started rambling at the end. Then it moved toward its exit and was being lowered gradually. You could still see it speak on video, albeit without a mic.

Sean: Now we just need to equip this little robot with a wheelbase. I know the ideal founder who can provide that. 

Honestly, these demonstrations always have a silly touch. I prefer not to take the podium, since we’ve touched on this earlier this week, but this was an impressive demo until it slightly stumbled.

This serves as yet another excellent example of how robotics presents numerous intriguing engineering dilemmas, fascinating physics challenges, and compelling integration issues; all of this was depicted in collaboration with Disney, promising the future of Disney parks where you can interact with Olaf from “Frozen” and capture photographs.

Nevertheless, these initiatives often ignore — or at least do not emphasize in events like this — the myriad other factors to consider when deploying such technologies. A notable YouTuber, Defunctland, produced an extensive video on this topic — four hours long, not overly lengthy — discussing Disney’s history with integrating robotic innovations in their parks.

The engineering hurdles are genuinely captivating, and it’s enlightening to learn about that past, but it consistently circles back to the same inquiry: What happens if a child kicks Olaf over? Then every other child witnessing Olaf being knocked down has their entire Disney trip ruined, negatively impacting the brand?

There’s a substantial social aspect associated with all this. Although it may sound trivial, this question is also pivotal in discussions regarding humanoid robots. There’s a lot of excitement surrounding various innovations, yet the conversation about the complex and murky social challenges involved in their integration into people’s lives remains limited. The engineering challenges, while impressive, consistently take center stage.

Kirsten: I have a counter-argument, and then we must transition to our next [topic]. This presents a job creation opportunity, as Olaf will need a human caretaker at Disneyland, likely dressed as Elsa or something similar. One could envision this engineering endeavor creating jobs.

The AI coding firm Cursor introduced a new model this week named Composer 2, which it touted as delivering “frontier-level coding intelligence.” 

Nevertheless, an X user known as Fynn quickly contended that Composer 2 was merely “Kimi 2.5” enhanced with extra reinforcement learning — Kimi 2.5 is an open-source model that was recently unveiled by Moonshot AI, a Chinese enterprise supported by Alibaba and HongShan (previously Sequoia China). 

To support this claim, Fynn referenced code that appeared to reveal Kimi as the underlying model.

“[A]t least change the model ID,” they derided.

This was an unexpected turn, considering Cursor is a well-capitalized U.S. startup that secured a $2.3 billion funding round last autumn at a $29.3 billion valuation, and is said to be generating over $2 billion in annualized revenue. Moreover, the firm did not mention Moonshot AI or Kimi in its announcement.

However, Lee Robinson, Cursor’s vice president of developer education, soon admitted, “Yep, Composer 2 began from an open-source foundation!” But he clarified, “Only about 1/4 of the compute allocated to the final model came from the base, with the remainder sourced from our training.” Consequently, he noted that Composer 2’s performance across various benchmarks is “very different” from that of Kimi.

Robinson also asserted that Cursor’s application of Kimi aligned with the terms of its license, a notion reiterated by the Kimi account on X in a subsequent message congratulating Cursor, stating that Cursor utilized Kimi “as part of an authorized commercial partnership” with Fireworks AI.

“We are delighted to see Kimi-k2.5 serving as the foundation,” the Kimi account stated. “Witnessing our model seamlessly integrated through Cursor’s ongoing pretraining & intensive RL training is the open model ecosystem we cherish supporting.”

So why not recognize Kimi from the beginning? Beyond any potential embarrassment of not developing a model independently, leveraging a Chinese model might feel particularly sensitive at this moment, especially with the so-called AI “arms race” often depicted as a critical struggle between the United States and China. (For instance, observe Silicon Valley’s noticeable anxiety after the Chinese company DeepSeek launched a competing model early last year.)

Cursor co-founder Aman Sanger acknowledged, “Not mentioning the Kimi base in our blog initially was a mistake. We’ll rectify that for the next model.”

Recently, Elon Musk detailed ambitious aspirations for a collaboration in chip production involving his companies, Tesla and SpaceX.

According to Bloomberg, Musk revealed his intentions on Saturday night during an event in Austin, Texas, presenting a photo that indicates the “Terafab” facility he envisions will be constructed close to Tesla’s Austin base and “gigafactory.”

Musk articulated that he’s pursuing this venture because chip manufacturers are not producing semiconductors rapidly enough to meet the demands of his companies’ artificial intelligence and robotics: “We either establish the Terafab or we lack the chips, and we require the chips, hence we establish the Terafab.”

The aim is to produce chips capable of supporting 100 to 200 gigawatts of computational power annually on Earth, as well as a terawatt in space, Musk stated. He did not provide a timeline for these initiatives.

As noted by Bloomberg, Musk lacks a background in semiconductor fabrication; however, he is known for frequently overpromising regarding objectives and deadlines.