Elon Musk's xAI sues former engineer over leaking Grok secrets and selling to OpenAI

Elon Musk’s artificial intelligence startup xAI has filed a lawsuit against a former engineer, accusing him of stealing confidential information about its Grok chatbot before moving to rival OpenAI.

The case, lodged in a California federal court, centres on Xuechen Li, who joined xAI in early 2023 as part of a 20-member technical team responsible for training and developing Grok’s AI models. According to the complaint, Li sold $7 million worth of company stock earlier this year before resigning in July. He was due to start at OpenAI in August.

xAI alleges that before his departure, Li copied “confidential information and trade secrets” from his company laptop onto a personal storage device. The filing claims Li took steps to conceal his actions by deleting browser history and system logs, renaming and compressing files, and attempting to “cover his tracks.” The startup says Li admitted to taking documents during a meeting on 14 August, although further material was later discovered on his devices.

The company argues the data relates to “cutting-edge AI technologies with features superior to those offered by ChatGPT and other competing products,” and that the material could give OpenAI a “potential overwhelming edge in the race to dominate the AI landscape.” xAI is seeking monetary damages as well as a restraining order to block Li from taking up his new role at OpenAI.

The lawsuit underscores both the intense competition for AI talent and the escalating legal hostilities between Musk and his former company. Musk co-founded OpenAI in 2015 but has become one of its fiercest critics since ChatGPT’s release in 2022. He has sued OpenAI and its primary backer Microsoft, alleging a shift from its non-profit mission to profit-driven motives, while OpenAI countersued him earlier this year for harassment.

Separately, xAI has also filed a lawsuit in Texas against OpenAI and Apple, accusing them of monopolising AI chatbots on Apple devices.