Musk’s xAI sues ex-engineer for allegedly taking trade secrets to OpenAI

Elon Musk’s AI startup xAI is suing a former engineer for allegedly stealing confidential trade secrets and taking them to its fierce AI-market rival, OpenAI.

The lawsuit, which was filed on Thursday in California federal court that Xuechen Li, accuses Xuechen Li of stealing confidential information related to "cutting-edge AI technologies with features superior to those offered by ChatGPT,” according to Reuters.

Li was allegedly planning to take that information to OpenAI earlier this month, where he was supposed to start a new job.

According to the lawsuit, Li started working as an engineer at xAI last year, developing its own generative AI chatbot Grok. He stole trade secrets related to Grok in July, shortly after accepting a job offer from OpenAI. At the same time, Li sold $7 million in xAI stock.

According to xAI, these secrets could allow OpenAI to significantly improve ChatGPT with its "more innovative AI and imaginative features."

Reportedly, Li admitted to stealing company files and "covering his tracks" in an August 14th meeting, although xAI later discovered more undisclosed stolen materials on his devices.

xAI is now seeking an unspecified amount of monetary damages, as well as a restraining order that would prevent Li from joining OpenAI.

Earlier this week, Musk’s company sued Apple and OpenAI for illegally conspiring to thwart competition for artificial intelligence.

The lawsuit accused the companies of locking up markets “to maintain their monopolies and prevent innovators like X and xAI from competing.”

"If not for its exclusive deal with OpenAI, Apple would have no reason to refrain from more prominently featuring the X app and the Grok app in its App Store," the lawsuit said.