Elon Musk’s artificial intelligence company xAI has taken legal action against a former employee, accusing him of stealing confidential information connected to the company’s Grok chatbot. The lawsuit, filed in a California federal court, claims that Xuechen Li, who worked as part of the technical team at xAI, copied sensitive data before resigning to join rival firm OpenAI.
According to the complaint, Li joined xAI in February last year and played a key role in training and developing Grok’s next-generation AI models. Before leaving the company in July, he allegedly copied trade secrets from his office laptop onto a storage device and attempted to erase his digital footprint by deleting browser history and system logs. He also reportedly renamed and compressed files before moving them to his personal device.
xAI believes the information taken includes advanced technologies and model features that give Grok an edge over competitors such as ChatGPT. The company argues that these stolen trade secrets could help strengthen OpenAI’s offerings and provide it with a major advantage in the global AI race.
The lawsuit further claims that Li admitted to stealing confidential information during an internal meeting on August 14 but failed to disclose the full extent of the material he had taken. His resignation came on July 28, shortly after selling company shares worth around seven billion dollars, and just weeks before he was scheduled to join OpenAI on August 19. xAI is now seeking a restraining order to block his appointment at OpenAI and is demanding financial damages.
This legal battle comes against the backdrop of Elon Musk’s turbulent history with OpenAI. Musk co-founded OpenAI in 2015 alongside Sam Altman and Greg Brockman but later distanced himself from the company. Since the launch of ChatGPT in 2022, Musk has become one of OpenAI’s most vocal critics, accusing the firm and its primary backer Microsoft of abandoning their non-profit mission in favor of profits. He has also launched multiple lawsuits against both companies, including one that accuses Apple and OpenAI of monopolizing the AI chatbot market on Apple devices.
The ongoing dispute between Musk and OpenAI highlights the intensity of the competition in the AI sector, where companies are racing to build the most advanced models and secure dominance in a market that could define the future of technology. With the xAI lawsuit now underway, the clash between Musk and his former collaborators shows no signs of slowing down.
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