Elon Musk's Xai Sues Ex-Engineer For Allegedly Taking Secrets To Openai: Report

Elon Musk's artificial intelligence startup, xAI, has reportedly sued a former engineer for allegedly taking secrets to rival OpenAI.

According to a Reuters report, xAI filed a case against Xuechen Li in a California federal court, alleging that Li leaked trade secrets related to its Grok AI chatbot to OpenAI.

The report adds that xAI has accused Li of leaking“cutting-edge AI technologies with features superior to those offered by ChatGPT” to OpenAI when he joined the company for his new job earlier this month. It added that Li worked on and helped train the Grok AI chatbot after joining xAI in 2024. He left the AI startup, sold $7 million in xAI stock, and joined OpenAI in July, the report added, citing the lawsuit filed by xAI.

The company also said in its lawsuit that Li admitted to stealing company files and that xAI found additional stolen material on his devices that he did not disclose. xAI has sued for an unspecified amount of damages, and it has sought to block Li's move to OpenAI, the report said.

Earlier on Monday, xAI sued OpenAI and Apple Inc. (AAPL), accusing the two companies of anti-competitive practices. Separately, Musk has sued and publicly criticized OpenAI co-founder and CEO Sam Altman, as well as OpenAI, for moving away from the original non-profit mission. Musk is also one of the co-founders of OpenAI.

xAI and OpenAI are not listed publicly at the moment. Retail sentiment on Stocktwits around xAI was in the 'bullish' territory, while users felt 'bearish' about OpenAI.

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