Musk's xAI sues engineer for allegedly taking secrets to OpenAI

xAI filed a lawsuit in California federal court against former engineer Xuechen Li, accusing him of stealing trade secrets tied to its Grok chatbot. In July 2025, Li, who recently joined OpenAI, took confidential AI technology details, which xAI claims surpass ChatGPT’s capabilities. During an August 14 meeting, Li admitted to stealing files and “covering his tracks.”

Further investigation revealed additional undisclosed stolen material on his devices. xAI alleges these secrets could bolster OpenAI’s ChatGPT with “more innovative AI and imaginative features.” The lawsuit seeks unspecified monetary damages and a restraining order to block Li’s move to OpenAI.

This case underscores the fierce rivalry between Musk’s xAI and OpenAI, where Li began working after selling $7 million in xAI stock. The legal action highlights the intense competition for AI talent and proprietary technology in the industry.