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SAN FRANCISCO (CN) — Elon Musk’s artificial intelligence company claims OpenAI stole confidential information to better position themselves against the tech billionaire’s xAI and its chatbot, Grok.
X.AI Corp. and X.AI LLC say that OpenAI is operating a “strategic campaign” against xAI by hiring former xAI employees with knowledge of confidential information.
“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 plaintiffs said in the complaint filed in the Northern District of California.
They add that OpenAI “poached” no less than eight xAI employees in its “deliberate scheme” against the company because OpenAI was threatened by Grok, which competes with OpenAI’s ChatGPT.
“OpenAI’s conduct, in response to being out-innovated by xAI whose Grok model overtook OpenAI’s ChatGPT models in performance metrics, reflects not an isolated lapse, but a strategic campaign to undermine xAI and gain unlawful advantage in the race to build the best artificial intelligence models,” the plaintiffs say in the complaint.
A representative for xAI did not immediately respond to a request for comment. On X, Musk responded to a post about the lawsuit, saying: “We sent them many warning letters, but they continued to cheat. Lawsuit was the only option after exhausting all others.”
In the Wednesday lawsuit, the plaintiffs focus on three former xAI employees: Xuechen Li, Jimmy Fraiture and an unnamed senior finance executive, who they say had access to confidential information and took that information to OpenAI.
xAi previously filed a lawsuit against Li on Aug. 28, claiming the former engineer stole confidential information and trade secrets. On Sept. 2, U.S. District Judge Rita Lin, a Barack Obama appointee, ordered Li to turn over his personal electronic devices and temporarily blocked him from working at OpenAI or another competitor of xAI concerning generative AI as well as communicating about generative AI.
The plaintiffs say Fraiture was “harvesting” xAI source code to take to OpenAI, where he now works. They also claim that the senior finance executive referenced in the complaint took xAI’s “‘secret sauce’ of rapid data center deployment” to OpenAI.
An OpenAI spokesperson denied the claims and called the lawsuit “the latest chapter in Mr. Musk’s ongoing harassment,” referencing the string of lawsuits Musk has filed against OpenAI.
“We have no tolerance for any breaches of confidentiality, nor any interest in trade secrets from other labs," the spokesperson said.
On Aug. 25, Elon Musk’s X Corp. andxAI LLC filed a lawsuit against Apple and OpenAI over what they call anticompetitive behavior. They claim Apple and OpenAI have formed an exclusive partnership that unlawfully stifles competition in both the smartphone and generative AI chatbot markets, harming innovators like xAI and Grok.
Musk, an early investor and cofounder of OpenAI, also sued OpenAI CEO Sam Altman and his company in 2024, seeking a court order to prevent it from going through with for-profit restructuring. Musk and Altman, who co-founded OpenAI in 2015 and later clashed over who should lead it, have had a long-running feud over the startup’s direction ever since Musk stepped down from the company board in 2018.
In February, a Musk-led group of investors offered to buy OpenAI for about $97.4 billion to stop its conversion into a for-profit company, which Altman quickly rejected.
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