Elon Musk's xAI Sues OpenAI for Alleged Trade Secret Theft

Musk's xAI accuses rival OpenAI of stealing trade secrets

Sept 25 (Reuters) - Elon Musk's artificial intelligence startup xAI has sued rival OpenAI in California federal court for allegedly stealing its trade secrets to gain an unfair advantage in the race to develop AI technology. The lawsuit filed Wednesday, opens new tab said that OpenAI was engaged in a "deeply troubling pattern" of hiring away former xAI employees to gain access to trade secrets related to its AI chatbot Grok. "OpenAI is targeting those individuals with knowledge of xAI's key technologies and business plans -- including xAI's source code and its operational advantages in launching data centers -- then inducing those employees to breach their confidentiality and other obligations to xAI through unlawful means," the lawsuit said. Spokespeople for the companies did not immediately respond to requests for comment on the complaint on Thursday. Reporting by Blake Brittain in Washington; Editing by Chizu Nomiyama Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Artificial Intelligence Blake Brittain Thomson Reuters Blake Brittain reports on intellectual property law, including patents, trademarks, copyrights and trade secrets, for Reuters Legal. He has previously written for Bloomberg Law and Thomson Reuters Practical Law and practiced as an attorney.

xAI accuses OpenAI of stealing its trade secrets in new lawsuit

Elon Musk's xAI is suing OpenAI, alleging that the ChatGPT maker has stolen its trade secrets. The lawsuit comes after the company recently sued , Xuechen Li, for allegedly stealing confidential information from the company before taking a job at OpenAI. In its latest lawsuit, which was reported by Sherwood, xAI says that Li's alleged actions are part of "a broader and deeply troubling pattern of trade secret misappropriation, unfair competition, and intentional interference with economic relationships by OpenAI." According to xAI's lawyers, OpenAI also hired two other xAI employees who stole proprietary information from Musk's company. "Another early xAI engineer -- Jimmy Fraiture -- was also harvesting xAI's source code and airdropping it to his personal devices to take to OpenAI, where he now works," the states. "Meanwhile, a senior finance executive brought another piece of the puzzle to OpenAI -- xAI's 'secret sauce' of rapid data center deployment -- with no intention to abide by his legal obligations to xAI." OpenAI didn't immediately respond to a request for comment on the lawsuit. Musk, of course, has a complicated history with the ChatGPT maker, and this isn't the first time his rival AI company has sued OpenAI. Last month, xAI against OpenAI and Apple over Grok's placement on App Store charts. Musk alleged that ChatGPT rank in the top spot represented an "unequivocal antitrust violation." Musk has also filed numerous lawsuits against OpenAI over its relationship and its move to become a company.

Musk's xAI accuses rival OpenAI of stealing trade secrets in lawsuit

An illustration shows a 3D-printed miniature model of Elon Musk and the xAI logo. (Dado Ruvic/Reuters) Elon Musk's artificial intelligence company has accused rival OpenAI of stealing trade secrets with the help of employees it hired away in a new lawsuit. The xAI suit alleges that three former employees -- two engineers and a senior executive -- passed along source code and other business secrets after they went to work for OpenAI. It also claims there is a "strategic campaign" to undermine xAI, the AI start-up Musk formed in 2023 that also owns X, his social media network.

Elon Musk's xAI accuses OpenAI of stealing trade secrets in new lawsuit

Suit alleges OpenAI has a 'troubling pattern' of hiring former xAI workers to access secrets about the Grok chatbot Elon Musk's artificial intelligence startup xAI has accused rival OpenAI of stealing its trade secrets in a new lawsuit, the latest in Musk's legal assault on his former business partner, Sam Altman. The lawsuit, filed on Wednesday in California federal court, alleged that OpenAI was engaged in a "deeply troubling pattern" of hiring away former xAI employees to gain access to trade secrets related to its AI chatbot Grok. The company says OpenAI is pursuing unfair advantages in the race to develop AI technology. "OpenAI is targeting those individuals with knowledge of xAI's key technologies and business plans, including xAI's source code and its operational advantages in launching data centers, then inducing those employees to breach their confidentiality and other obligations to xAI through unlawful means," the lawsuit states. Musk and xAI have launched numerous lawsuits against OpenAI in recent years as part of a longstanding feud between Altman and Musk. The relationship between the two has grown increasingly hostile as Altman and OpenAI's power in the tech industry has grown, with Musk previously attempting to block the AI startup's plans to convert to a for-profit enterprise. xAI's latest complaint claims it discovered the alleged campaign to undermine the company while investigating allegations of trade secret theft against former engineer Xuechen Li, whom it has individually accused of taking confidential information to the ChatGPT maker in a separate lawsuit. Li has not yet responded to the allegations. According to the complaint, OpenAI hired away former company engineer Jimmy Fraiture and an unnamed senior finance executive in addition to Li in order to obtain xAI trade secrets. Spokespeople for the companies did not immediately respond to requests for comment on the complaint on Thursday. The lawsuit also included a screenshot of an email sent in July by Alex Spiro, Musk and xAI's lawyer, to a former xAI executive accusing them of breaching their confidentiality obligations. The former employee, whose name is redacted in the screenshot, responded to Spiro with a one-line email that said "suck my dick". Before becoming OpenAI's legal nemesis, Musk co-founded the company with Altman in 2015, then departed in 2018 after a failed bid for control. Musk has accused Altman of breaking a "founding agreement" that OpenAI would work for the betterment of humanity, claiming that his pivot to partner with Microsoft and seek profits negates its principles. OpenAI and Altman have said that Musk previously supported a for-profit model and is retaliating out of jealousy. Musk, who is mired in a multitude of lawsuits both as a plaintiff and defendant, also sued OpenAI and Apple last month over accusations of anti-competitive behavior and Apple favoring ChatGPT in its app store. The suit claimed that his rivals engaged in "a conspiracy to monopolize the markets for smartphones and generative AI chatbots". Altman posted on X, Musk's social network, in response: "This is a remarkable claim given what I have heard alleged that Elon does to manipulate X to benefit himself and his own companies and harm his competitors and people he doesn't like." xAI's new lawsuit is part of a high-stakes competition in Silicon Valley to hire AI-related talent and gain market share in the burgeoning, multibillion-dollar industry. Companies such as Meta have thrown vast sums of money at AI researchers and executives in hopes that it will give them a competitive advantage in the race to build increasingly advanced AI models.

Elon Musk Is Fuming That Workers Keep Ditching His Company for OpenAI

As you're probably well aware by now, Elon Musk and Sam Altman have a long history. The two cofounded OpenAI back in 2015 as a nonprofit with an ostensibly altruist mission. But then Musk stormed out of the company three years later. Reportedly, it was because he beefed with Altman's leadership. There's been bad blood between them ever since -- a lot of which has been playing out in the courts. In 2024, Musk sued OpenAI and Altman for violating its founding principles by pursuing profits over the public good. As the lawsuit dragged on, he then tried to get a federal judge to block OpenAI's restructuring from a non-profit into a purely for-profit company. The judge swatted down Musk's plea, but OpenAI has since given up on becoming an out-and-out for-profit. It's now trying to convert into a public benefit corporation, but with similar struggles that are tying up billions of dollars in cash it needs from its investors. For whatever reason, Musk dropped the original suit -- but is now suing Altman and his company again for basically the same reason. If that series of moves from Musk reek of jealousy that his friend-turned-foe now commands the most important AI company in the world which is being valued at half a trillion dollars, a brand new lawsuit filed this week by Musk's company xAI seems driven by rage that Altman keeps poaching his talent. As The Guardian reports, the suit filed in a California court accuses OpenAI of a "deeply troubling pattern" of hiring former xAI employees to gain access to its trade secrets, including the source code behind its prized chatbot Grok. Seemingly, OpenAI is just dying to know how to make an AI that goes haywire and starts calling itself "MechaHitler." "OpenAI is targeting those individuals with knowledge of xAI's key technologies and business plans, including xAI's source code and its operational advantages in launching data centers, then inducing those employees to breach their confidentiality and other obligations to xAI through unlawful means," the lawsuit alleges, per the newspaper. Hiring a rival's ex-employees isn't illegal in itself, but it is at least one way of conducting corporate espionage. An aggrieved corporation would have to prove that there's a concerted, systematic effort to snipe a rival's talent, however, which is what Musk and xAI are alleging. The allegations emerged from xAI investigating its former engineer Xuechen Li for stealing trade secrets. Amid that probe, Musk's company says it uncovered a "deliberate scheme" to steal these secrets by hiring eight former xAI employees, per The Information. Along with Li, OpenAI also poached former xAI engineer Jimmy Fraiture and another senior finance executive, the company alleged. That accused finance executive didn't take kindly to the allegations. When Musk's lawyer sent them an email accusing them of breaching their confidentiality agreement, according to a screenshot in the lawsuit, they had a one sentence rebuttal. "Suck my dick," the employee responded. In not quite those same words, OpenAI also denied the allegations, calling it the "latest chapter in Mr Musk's ongoing harassment." Along with the lawsuits already mentioned, Musk is also suing OpenAI and Apple, accusing the two companies last month of colluding to keep ChatGPT at the top of the App Store while stopping its Grok app from climbing the charts. While we wouldn't put it past OpenAI, a company that so nakedly dropped its open-source and non-profit act the second it smelled Microsoft money, of engaging in nefarious practices, it's pretty rich for Musk to be mad about his employees fleeing to competitors, innocently or otherwise. He's notorious for rage-firing employees on the spot and treating the ones that don't worship the ground he walks on poorly. He's conducted brutal layoffs at his social media platform X -- Grok's stomping ground lately -- and recently fired 500 xAI employees, replacing a Musk-company veteran in charge of the chatbot's data annotation team with a literal college kid. Big picture-wise, if the major AI firms that are all running up against the same wall in trying to improve their constantly hallucinating tech are just hiring each other's cast-offs, if you have to wonder if the industry's going nowhere fast.

Elon Musk's xAI Sues OpenAI Again, This Time Over Alleged Trade Secret Theft - Decrypt

One engineer allegedly admitted in a "handwritten confession" to misappropriating code after encrypted communications with an OpenAI recruiter. Elon Musk's artificial intelligence company xAI filed a federal lawsuit on Wednesday against OpenAI, accusing its rival of orchestrating a "coordinated, unfair, and unlawful campaign" to steal proprietary technology through targeted employee poaching. The complaint, filed in California, alleges OpenAI "by hook or by crook" induced former xAI employees to misappropriate the company's entire source code, training methods, and data center deployment strategies. Musk, a co-founder of OpenAI alongside Sam Altman, Greg Brockman, Illya Sutskever, and others in 2015, stepped down from the board in 2018, citing conflicts of interest with his company, Tesla, and its self-driving cars. Since then, the tech billionaire has assumed a combative stance against OpenAI, including filing a separate lawsuit last month. OpenAI recruiter Tifa Chen simultaneously targeted multiple xAI employees, offering multi-million dollar packages to engineers who then stole source code and uploaded it to personal devices within hours of their communications, the lawsuit alleges. Xuechen Li, an early xAI engineer, allegedly "uploaded the entire xAI source code base to a personal cloud account" in July 2025, and later "admitted in a handwritten confession" that he misappropriated xAI's code and presentation materials on training techniques. The lawsuit details timestamps showing Li's code theft occurred within hours of encrypted Signal messages with Chen, who allegedly responded "no way!" after Li copied the files, before OpenAI extended its multi-million dollar offer. Jimmy Fraiture, another early xAI engineer, allegedly "used the AirDrop feature to transfer" confidential source code "at least five times" after signing with OpenAI, stealing "the majority of xAI's code" he oversaw, plus experimental folders from four co-founders. An unnamed senior finance executive who left for OpenAI allegedly called these operations xAI's "secret sauce," saying, "The data center team. Their speed and precision blew me away. I would NEVER want to compete against them." The executive then took a lesser role at OpenAI, focused on data center spending strategy even though he had no prior AI experience, and when confronted about confidentiality obligations, allegedly "responded with crude sexual expletives" and refused to sign termination documents. Navodaya Singh Rajpurohit, legal partner at Coinque Consulting, told Decrypt the case "leans heavily on employee poaching," noting that whether it crosses from aggressive recruiting to unlawful misappropriation "will depend on evidence not included in the filing," and that "hiring alone is rarely enough to prove trade-secret misuse." Ishita Sharma, managing partner at Fathom Legal, told Decrypt that xAI must define its "secret sauce" broadly, grouping GPU racking, vendor contracts, pricing curves, and orchestration playbooks, which, she noted, can be described "by the results they deliver -- like faster deployment or cheaper scaling, without putting the exact technical diagrams or formulas on the record." Sharma said "the recruiter angle is trickier," since liability depends on whether recruiters acted as agents of OpenAI with the company's knowledge. For OpenAI's defense, she explained, the strongest approach would be to show independent creation through "time-stamped records: internal Git commits, R&D notes, supplier invoices, and emails," with earlier documentation providing the most credibility. xAI seeks damages, restitution, and injunctions requiring OpenAI to purge xAI material from its systems and even destroy models built with it.

Elon Musk's xAI is now suing OpenAI over stolen trade secrets

TL;DR: Elon Musk's xAI has filed a new lawsuit against OpenAI, accusing the company of stealing trade secrets by hiring former xAI employees. This legal action highlights ongoing tensions and competitive challenges between the AI firms in protecting proprietary technology and intellectual property. Elon Musk's xAI has filed a lawsuit against OpenAI, claiming the ChatGPT-maker has stolen trade secrets by hiring two former xAI employees. xAI filed a new lawsuit against Xuechen Li, a former xAI employee who sold his stock in the company and departed for a position at xAI rival company, OpenAI. It's unclear whether Li actually began working at OpenAI, but xAI's lawsuit accuses the former employee of stealing trade secrets from xAI to take to OpenAI, specifically secrets related to xAI's AI model, Grok. The lawsuit also states Li, an "early xAI engineer," along with Jimmy Fraiture, a former "senior finance executive" at xAI, were "induced" by OpenAI to steal trade secrets in its desire to win the artificial intelligence race. xAI claims that OpenAI is threatened by the "innovativeness and creativity of xAI's code," and that Grok currently offers "more innovative and imaginative than those offered by its competitors, including OpenAI." Furthermore, xAI cites Grok's leading scores on industry benchmarks, and that OpenAI simply became the dominator in the AI race by being the "first mover." The lawsuit doesn't stop there, as xAI claims OpenAI is engaging in a "coordinated, unfair, and unlawful campaign" to target xAI employees for recruiting. An OpenAI spokesperson responded to the lawsuit, stating, "This new lawsuit is the latest chapter in Mr Musk's ongoing harassment. We have no tolerance for any breaches of confidentiality, nor any interest in trade secrets from other labs."

Musk's xAI accuses rival OpenAI of stealing trade secrets - The Economic Times

Elon Musk's artificial intelligence startup xAI has sued rival OpenAI in California federal court for allegedly stealing its trade secrets to gain an unfair advantage in the race to develop AI technology. The lawsuit filed Wednesday said that OpenAI was engaged in a "deeply troubling pattern" of hiring away former xAI employees to gain access to trade secrets related to its AI chatbot Grok. "OpenAI is targeting those individuals with knowledge of xAI's key technologies and business plans-including xAI's source code and its operational advantages in launching data centers-then inducing those employees to breach their confidentiality and other obligations to xAI through unlawful means," the lawsuit said. Spokespeople for the companies did not immediately respond to requests for comment on the complaint on Thursday.

Musk accuses Altman's OpenAI of trade secret theft in new lawsuit

The strained relationship between Musk and Altman is no secret. Now, Musk's AI venture has launched legal action against OpenAI, alleging the company systematically hires former xAI staff to access confidential information. The complaint claims OpenAI seeks unfair advantages in AI development by targeting employees with knowledge of xAI's technologies and operational strategies. A dispute that also reflects the ongoing tension between Musk and Altman, dating back to their early collaboration and Musk's departure from OpenAI. What do you think about this? Of course, if you want to learn more details, you can do so through the following link. Go!

Musk vs Altman 3.0: xAI Says OpenAI Stole Grok Secrets & Poached Talent

Elon Musk's xAI Drags OpenAI to US court, Alleges Theft of Grok Chatbot Code and Employee Poaching Elon Musk's artificial intelligence company, xAI, has sued OpenAI for the second time. The venture alleges that the creator of ChatGPT is poaching workers to steal trade secrets and gain a competitive advantage in the world of artificial intelligence. The lawsuit was filed in a California federal court on Wednesday, alleging that OpenAI is intentionally targeting xAI workers. It states that this is being done to steal confidential information, such as code behind the company's Grok chatbot.

Musk's xAI accuses rival OpenAI of stealing trade secrets

(Reuters) -Elon Musk's artificial intelligence startup xAI has sued rival OpenAI in California federal court for allegedly stealing its trade secrets to gain an unfair advantage in the race to develop AI technology. The lawsuit filed Wednesday said that OpenAI was engaged in a "deeply troubling pattern" of hiring away former xAI employees to gain access to trade secrets related to its AI chatbot Grok. "OpenAI is targeting those individuals with knowledge of xAI's key technologies and business plans--including xAI's source code and its operational advantages in launching data centers--then inducing those employees to breach their confidentiality and other obligations to xAI through unlawful means," the lawsuit said. Spokespeople for the companies did not immediately respond to requests for comment on the complaint on Thursday. xAI said it discovered the alleged campaign to undermine the company while investigating allegations of trade secret theft against former engineer Xuechen Li, who it has accused of taking confidential information to the ChatGPT maker in a separate lawsuit. Li has not yet responded to the allegations. xAI has separately sued Apple in federal court for allegedly conspiring with OpenAI to suppress rival platforms. Apple has not yet responded to the lawsuit. Musk is also suing OpenAI over its conversion to a for-profit company, while OpenAI has countersued Musk for harassment. xAI's new lawsuit is part of a broader legal battle between Musk and OpenAI, which he co-founded, and underscores a high-stakes race in Silicon Valley to hire AI-related talent and gain market share in the burgeoning industry. According to the complaint, OpenAI hired away former company engineer Jimmy Fraiture and an unnamed senior finance executive in addition to Li in order to obtain xAI trade secrets. Fraiture, who is not a defendant in the complaint, could not immediately be reached for comment. (Reporting by Blake Brittain in Washington; Editing by Chizu Nomiyama and Deepa Babington)

Elon Musk's xAI files lawsuit against OpenAI over alleged trade secret theft: All we know

The lawsuit adds to Musk's broader legal battles with OpenAI and Apple over AI competition. xAI, Elon Musk's artificial intelligence company has filed a lawsuit against OpenAI, accusing the company of misappropriating confidential information and targeting its employees to gain an edge in the AI race. The lawsuit, which was filed in California on Wednesday, claims OpenAI has been following a "pattern of misconduct" by recruiting former xAI staff members who allegedly had access to sensitive details about its proprietary technology, including its AI chatbot Grok, as well as strategic plans for data center operations. According to the complaint filed by the company, ChatGPT maker allegedly encouraged employees to violate confidentiality agreements and other obligations. OpenAI, on the other hand, has denied the allegations. According to Reuters, the case is the most recent chapter in Musk's harassment campaign. "OpenAI is targeting those individuals with knowledge of xAI's key technologies and business plans, including xAI's source code and its operational advantages in launching data centers, then inducing those employees to breach their confidentiality and other obligations to xAI through unlawful means," the lawsuit said as quoted by Reuters. Also read: CMF Phone 2 Pro available for under Rs 15,000 during Flipkart Big Billion Days 2025 xAI stated that it became aware of the alleged efforts after previously suing a former engineer, Xuechen Li, accusing him of leaking protected information to OpenAI. However, Li has yet to respond publicly to the allegations. The complaint also names another former employee, Jimmy Fraiture, and an unnamed senior finance executive, but they are not listed as defendants. This is not the first time Elon Musk has sued OpenAI. Musk has already sued the company over its transition to a for-profit model, and OpenAI has countersued him for harassment. Separately, xAI has sued Apple, accusing the iPhone maker of conspiring with OpenAI to stifle competition.

Elon Musk's xAI sues OpenAI over alleged theft of AI trade secrets

According to xAI, the alleged theft involved hiring former employees who had access to key company information. Elon Musk's artificial intelligence startup, xAI, has taken legal action against rival company OpenAI, filing a lawsuit in California federal court. The case accuses OpenAI of stealing trade secrets to gain an unfair edge in the competitive field of AI technology. According to xAI, the alleged theft involved hiring former employees who had access to key company information, including details about xAI's AI chatbot Grok. "OpenAI is targeting those individuals with knowledge of xAI's key technologies and business plans -- including xAI's source code and its operational advantages in launching data centers -- then inducing those employees to breach their confidentiality and other obligations to xAI through unlawful means," the lawsuit states, according to Reuters. An OpenAI spokesperson denied the allegations in a statement, calling the lawsuit "the latest chapter in Mr. Musk's ongoing harassment" against the company. Also read: OpenAI introduces ChatGPT Pulse for AI-powered morning briefings: How it works xAI said it discovered the alleged plan to undermine the company after previously filing a lawsuit against former engineer Xuechen Li. The company claims Li took confidential information to OpenAI, which led to accusations of trade secret theft in a separate case. In addition to Li, xAI alleges that OpenAI hired former company engineer Jimmy Fraiture and a senior finance executive to gain access to its trade secrets. For those unaware, xAI has also filed a separate lawsuit against Apple, accusing the tech giant of conspiring with OpenAI to suppress competing AI platforms. Also read: Intel in talks with Apple over potential investment amid struggles The legal battles between Musk and OpenAI are extensive. Musk is suing OpenAI over its conversion to a for-profit company, while OpenAI has countersued him for harassment. These disputes highlight the intense competition in Silicon Valley for AI talent and technology, as companies race to secure their place in the rapidly growing artificial intelligence market.