Elon Musk’s xAI is taking legal action against a former employee, Xuechen Li, for allegedly stealing Grok trade secrets and planning to join OpenAI. The lawsuit, filed in California federal court, claims Li copied confidential data to gain an edge at his new job. Elon Musk’s xAI claims Xuechen Li stole sensitive data about advanced AI technologies. The company says these technologies power Grok and outperform ChatGPT’s features.

Alleged Theft of Grok Trade Secrets

Grok Trade secrets compromised

xAI accuses Li of stealing sensitive information tied to its Grok AI chatbot. The company says this data could boost OpenAI’s ChatGPT, giving it a competitive advantage in the AI race. Here are key details from the lawsuit:

  • Employment Details: Li joined xAI in February 2024 as part of a 20-engineer team, working on Grok’s advanced AI models.
  • Theft Allegations: Before resigning on July 28, 2025, Li allegedly copied Grok trade secrets from his work laptop to a personal storage device.
  • Cover-Up Attempts: Li reportedly deleted browser history, system logs, and renamed files to hide his actions.
  • Stolen Data Scope: The stolen secrets include cutting-edge AI tech, which xAI claims surpasses features in ChatGPT and similar products.
  • Admission: On August 14, 2025, Li admitted to stealing some data but failed to disclose additional stolen material, per xAI.
  • Resignation and Shares: Li resigned days after xAI’s $7 billion share offload, raising suspicions about his motives.
  • Legal Demands: xAI seeks a restraining order to block Li’s move to OpenAI, set for August 19, 2025, and demands monetary damages.

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This lawsuit adds to Elon Musk’s ongoing disputes with OpenAI. Musk, who co-founded OpenAI in 2015 with Sam Altman and Greg Brockman, has since criticized its shift toward profit-driven goals. He previously sued OpenAI and Microsoft for abandoning its societal-benefit mission and filed another lawsuit with Apple, alleging monopolistic practices in the AI chatbot market. OpenAI has countersued Musk, claiming harassment. The xAI lawsuit against Li highlights the fierce competition in AI development, with Grok trade secrets at the center of this legal battle.

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