Electric vehicle maker Rivian Automotive has agreed to pay $250 million to settle a class action shareholder lawsuit accusing the company of misleading investors ahead of its 2021 IPO.

The settlement, which still requires approval from the U.S. District Court for the Central District of California, comes after a turbulent few years marked by production setbacks, financial strain, and shifting demand in the U.S. EV market.

The lawsuit, filed by shareholder Charles Larry Crews, alleged that Rivian included misleading cost projections in its pre-IPO regulatory filings. Investors claimed the company failed to disclose the true expense of manufacturing its first vehicles—the R1T pickup truck and R1S SUV—resulting in a dramatic 20 percent price hike in early 2022. The sudden increase sparked customer outrage, mass order cancellations, and a steep drop in the company’s stock price.

Rivian, while agreeing to the payout, has denied any wrongdoing, saying in a statement that the settlement “is not an admission of fault or liability.” The company plans to cover $67 million of the total through its directors’ and officers’ liability insurance, while $183 million will come directly from its $4.8 billion in cash reserves as of June 30.

The price hike in 2022 represented a critical turning point for Rivian. When the company first launched the R1T in late 2021, it was positioned as a high-end electric adventure vehicle. But as supply chain pressures, rising material costs, and inflation mounted, Rivian raised prices by nearly a fifth—applying the new rates even to customers who had placed preorders months earlier. The backlash was immediate. CEO RJ Scaringe issued a public apology, writing, “It was wrong and we broke your trust in Rivian… I have made a lot of mistakes since starting Rivian more than 12 years ago, but this one has been the most painful.”

Although Rivian eventually reversed the price increase for existing preorders, the damage had already been done. The announcement wiped billions off Rivian’s market value, compounding investor losses that began shortly after its November 2021 IPO—then one of the largest in U.S. history, briefly valuing the startup at over $100 billion.

The case gained class action status in July 2024, with investors arguing that Rivian’s internal cost assessments were far higher than disclosed. Plaintiffs said this misrepresentation made the company’s vehicles appear more profitable than they were, misleading the market ahead of its public debut.

The settlement comes as Rivian faces growing financial and competitive pressures. Production of the R1 lineup has slowed amid declining demand and increased tariffs under President Trump’s trade policies, which have raised costs on imported components. Additionally, Rivian’s vehicles no longer qualify for the federal EV tax credit, further dampening consumer interest.

In response, Rivian has turned its focus to the upcoming R2 SUV, scheduled for launch in 2026. The new model will be significantly cheaper and aimed at the mass market. Rivian plans to build up to 150,000 units per year at its Illinois plant, with additional production capacity planned at a new factory under construction in Georgia. The company hopes the R2 will help it achieve the scale necessary to compete with Tesla, Ford, and other established automakers.

However, Rivian’s path to this goal remains uncertain. Earlier this week, the company announced the layoff of more than 600 employees, part of a restructuring designed to cut costs and streamline operations. CEO Scaringe has temporarily taken on the role of interim chief marketing officer as the company reassesses its strategy amid softening EV demand and tightening capital markets.

Once seen as a key challenger to Tesla, Rivian has struggled to meet early investor expectations. The company’s 2021 debut was fueled by strong backing from Amazon and Ford, both of which later scaled back their stakes. Analysts have since warned that Rivian must balance cash conservation with the heavy investment required to launch new models and expand production.

The $250 million settlement will close one of Rivian’s most damaging legal chapters—but it will also underline the lingering fallout from the company’s missteps during its high-profile market entry.

Implications for Investor Confidence and Capital-Raising Prospects

The settlement arrives at a sensitive time when Rivian will likely need to return to capital markets to fund its next growth phase. Analysts note that while the company’s $4.8 billion in cash reserves provides a short-term cushion, the buildout of the new Georgia plant and tooling for the R2 SUV could require billions more by 2026. Any erosion of investor confidence could therefore complicate future fundraising efforts.

In capital markets, perception often drives access to liquidity—and for Rivian, the lawsuit’s implications go beyond the immediate financial cost. The allegations of misleading IPO disclosures, even without an admission of guilt, may cause institutional investors to apply deeper scrutiny to the company’s forecasts and disclosures going forward. This could increase Rivian’s cost of capital if new equity or debt offerings are met with skepticism.

At the same time, Rivian’s decision to settle rather than prolong litigation could help restore a measure of investor trust. The company has signaled an intent to move forward cleanly ahead of the R2 rollout by closing a drawn-out legal dispute. For long-term investors, particularly those betting on Rivian’s ability to scale production and achieve profitability, this resolution removes a key source of uncertainty from the company’s balance sheet.

Some analysts also point out that the settlement’s modest size relative to Rivian’s cash reserves suggests the company remains financially stable. However, as competition intensifies and margins narrow, maintaining liquidity will be crucial to sustaining investor confidence.

OpenAI is reportedly developing a new generative music tool capable of composing songs and instrumentals from text and audio prompts — another sign of the company’s accelerating expansion beyond conversational AI and into broader creative and consumer markets.

The report, published by The Information, said the model could generate music for videos or add instrumental accompaniment, such as guitar or piano, to existing vocals.

Many believe the project reflects OpenAI’s deepening push into multimedia creation, as it seeks to position itself as an “everything app” — one that integrates, among other things, text, voice, video, and now music — all within a unified ecosystem. The move follows OpenAI’s recent rollout of Sora, its text-to-video model, and its continued development of voice and image generation tools, suggesting a deliberate effort to dominate every creative medium through artificial intelligence.

According to The Information, OpenAI has been collaborating with students from the Juilliard School, one of the world’s most renowned music conservatories, to annotate musical scores. These annotations are being used to train the model to understand rhythm, harmony, and composition structures — a sign that the company is prioritizing accuracy and musical authenticity over mere novelty.

While OpenAI has experimented with generative music models in the past, those earlier prototypes came before the launch of ChatGPT and never reached public release. The current project, however, appears to be part of a broader monetization strategy, as the company grapples with rising operational costs and mounting pressure to generate sustainable revenue.

OpenAI, which has received billions in backing from Microsoft, is spending heavily on computing infrastructure, data acquisition, and AI model training — costs that have ballooned since the introduction of GPT-4 and the ChatGPT Plus subscription service. Despite its soaring valuation, analysts say the company has yet to achieve profitability, and its latest ventures into new industries may reflect a strategic bid to diversify income streams and reduce dependence on corporate licensing deals.

The music tool, once launched, could integrate directly with ChatGPT or Sora, enabling users to generate songs, soundtracks, or musical accompaniment while simultaneously producing lyrics and visuals. Such integration would make OpenAI the first major AI company to offer a seamless, cross-media creative workflow — a potentially transformative move for content creators, filmmakers, and digital artists.

But OpenAI is entering a space already occupied by formidable rivals. Google’s MusicLM and Suno’s AI platform both allow users to generate music from text prompts, while startups like Udio are experimenting with collaborative songwriting tools powered by machine learning. What may set OpenAI apart, analysts say, is its ability to unify multiple creative capabilities under one AI system — a feat no other company has achieved at scale.

Still, the company’s rapid expansion raises familiar concerns about copyright and data ethics. Generative music tools rely heavily on training datasets that often include copyrighted material, with the potential to spark criticism from musicians and record labels who argue that such practices amount to unlicensed use of creative works. OpenAI’s collaboration with Juilliard students appears to be an attempt to preempt such criticism by grounding the model’s training data in properly annotated, licensed compositions.

OpenAI has not commented publicly on the project, nor has it confirmed a release date or product format. However, sources believe the tool could be unveiled as early as 2026 as part of OpenAI’s broader roadmap to merge language, vision, and sound into a unified AI interface.

If successful, the new tool could redefine how music is composed, produced, and consumed — and potentially cement OpenAI’s role not just as a leading AI company, but as a foundational platform for the future of digital creativity.

Porsche AG has reported a steeper-than-expected operating loss of €966 million ($1.1 billion) for the third quarter, marking a sharp reversal from the €974 million profit recorded in the same period last year.

The German luxury automaker said the setback stemmed mainly from costs related to a sweeping rollback of its electric vehicle (EV) expansion strategy and the financial fallout of U.S. import tariffs.

Analysts surveyed by Visible Alpha had anticipated a smaller operating loss of €611 million, highlighting the extent of Porsche’s current troubles. The company’s slowdown denotes the turbulence facing Germany’s once-thriving auto sector as it grapples with the global EV price war led by Tesla and aggressive discounting by Chinese automakers such as BYD.

Porsche, long touted as a symbol of German precision and profitability since its 2022 stock market debut, is now battling a confidence crisis.

“We expect 2025 to be the trough that precedes a noticeable improvement for Porsche from 2026 onwards,” Chief Financial Officer Jochen Breckner said on Friday, adding that “large-scale solutions” were still being negotiated with labor unions to manage the company’s restructuring.

The carmaker maintained that its operating margin for 2025 could fall as low as 2%, compared with 14% last year. For 2026, it expects to rebound to a “high single-digit percentage,” Breckner said.

Porsche also disclosed that U.S. import tariffs will cost it roughly €700 million this year, forcing it to raise prices in the American market to offset part of the impact.

Breckner added that Porsche prices will rise further in the U.S. in the coming months as the company passes on tariff costs to consumers.

The CFO confirmed that Porsche will propose a “significantly lower 2025 dividend” than the €2.31 per preferred share paid for 2024, as part of an effort to conserve cash amid restructuring pressures.

In China, once the company’s biggest growth market, sales are expected to continue falling through 2026.

“We have to assume that the general market conditions will not improve in the foreseeable future,” Breckner said, describing persistent pricing pressures and slower luxury demand in the world’s largest auto market.

The German carmaker plans to cut 1,900 permanent jobs over the next few years, in addition to 2,000 temporary roles already being eliminated in 2025. Breckner said Porsche is preparing “a second package of cost-saving measures” focused on salary scales and employee perks rather than further layoffs, with details expected by year-end.

For the full year, Porsche estimates a €3.1 billion hit to earnings from restructuring and its decision to abandon in-house battery production. That figure includes the cost of dismantling parts of its EV expansion plan, which was once a cornerstone of its future growth strategy.

The company also confirmed that CEO Oliver Blume—who concurrently leads parent company Volkswagen—will step down from Porsche at the beginning of 2026. He will be succeeded by former McLaren Automotive CEO Michael Leiters, a move widely viewed as an effort to restore investor confidence. Leiters, who previously held senior engineering roles at Ferrari and Mercedes-AMG, is expected to inherit what Breckner described as “one of the most challenging transitions in Porsche’s modern history.”

The crisis at Porsche is already reverberating across the Volkswagen Group, which owns a 75% stake in the luxury brand. Porsche’s troubles add to a growing list of headwinds facing the Wolfsburg-based parent company, including a profit squeeze at Audi and declining demand for its mass-market models in China.

Volkswagen’s shares fell after Porsche’s results were published, as investors weighed the impact of the €3.1 billion hit to earnings on the group’s consolidated financials. The slump also adds pressure on Volkswagen’s management, which has been under scrutiny for its slow adaptation to the EV transition and its failure to gain traction against Chinese rivals.

Volkswagen had counted on Porsche’s strong margins to offset weaknesses in other brands. Last year, Porsche contributed more than one-third of Volkswagen Group’s total profit, with its 14% return on sales seen as a benchmark of efficiency. That figure now risks collapsing to as low as 2%, raising concerns among analysts that Volkswagen’s 2025 group earnings forecast may be too optimistic.

Although Volkswagen has not yet revised its consolidated outlook, some analysts believe that the loss of Porsche’s profit cushion could force the group to lower its guidance in coming quarters. Analysts say the automaker’s ability to maintain dividends and fund new EV investments could also come under strain if Porsche’s turnaround stalls beyond 2026.

Volkswagen’s luxury portfolio—comprising Porsche, Audi, Bentley, and Lamborghini—has traditionally served as its financial backbone, compensating for thin margins in mass-market segments such as VW, SEAT, and Skoda. But with Porsche now facing tariffs, declining Chinese sales, and restructuring costs, that advantage appears to be eroding.

In response, Volkswagen is expected to push for deeper cost cuts and may accelerate its strategic review of luxury operations to shield overall profitability. Breckner’s assurance that “2025 will be the trough” was echoed cautiously by investors who see 2026 as a critical year for Porsche to stabilize production, regain demand in the U.S. and China, and deliver the efficiency improvements required to restore margins.