Elon Musk’s xAI Accuses Former Engineer of Stealing Grok Secrets for OpenAI

Elon Musk’s artificial intelligence company, xAI, has filed a lawsuit against a former engineer, accusing him of stealing confidential information about its Grok chatbot and taking it to rival firm OpenAI.

The lawsuit, filed Thursday in a California federal court, claims that ex-employee Xuechen Li misappropriated “cutting-edge AI technologies with features superior to those offered by ChatGPT” before beginning his new role at OpenAI earlier this month.

According to the complaint, Li had worked as an engineer at xAI since 2024, contributing to the training and development of Grok—Musk’s answer to ChatGPT. The company alleges that in July, shortly after accepting an offer from OpenAI and selling $7 million worth of xAI stock, Li downloaded sensitive files containing proprietary information.

The lawsuit further states that Li confessed during an internal meeting on August 14 to taking certain materials and “covering his tracks,” though xAI later discovered additional files on his personal devices that had not been disclosed. Musk’s company insists these secrets could enable OpenAI to strengthen ChatGPT by incorporating xAI’s “more innovative AI and imaginative features.”

Neither Li, OpenAI representatives, nor attorneys for xAI responded immediately to Reuters’ requests for comment on Friday. OpenAI itself has not been named as a defendant in this case.

The legal move highlights the growing rivalry between Musk’s xAI and OpenAI, which he co-founded in 2015 but later parted ways with. The dispute comes amid an intense battle among top technology companies to secure and retain skilled AI talent in a rapidly advancing field.

This lawsuit is not Musk’s only legal action against OpenAI. Earlier this year, he filed a case against the company and its CEO, Sam Altman, alleging that OpenAI strayed from its original nonprofit mission to prioritize humanity’s benefit. In response, OpenAI countersued Musk in April, accusing him of harassment.

Just this week, Musk’s startup also launched a separate lawsuit in Texas against OpenAI and Apple, accusing them of monopolizing AI chatbot access on Apple devices.

In the current case, xAI is seeking monetary damages in an unspecified amount. The company is also requesting a restraining order to prevent Li from continuing his employment with OpenAI, citing the risk of its proprietary technologies being used to strengthen ChatGPT.

Legal experts note that trade secret disputes have become more common in the AI industry as firms compete fiercely to push the boundaries of machine learning and conversational technologies. Musk’s Grok chatbot, which launched last year and is integrated with his social media platform X (formerly Twitter), has been promoted as a challenger to OpenAI’s ChatGPT.

The outcome of the lawsuit could have broader implications for how tech companies protect proprietary innovations while also managing the high turnover of AI talent. For now, the legal fight between Musk’s ventures and OpenAI adds yet another chapter to an already heated rivalry shaping the future of artificial intelligence.