Elon Musk’s xAI Sues Former Engineer Over Alleged Data Theft

Elon Musk’s AI startup xAI has filed a lawsuit against a former engineer, Xuechen Li, accusing him of stealing proprietary data and passing it on to xAI’s direct competitor — Sam Altman’s OpenAI. After leaving Musk’s company, Li joined OpenAI, where he now works on training ChatGPT, replacing his previous work on Grok.

Li had been employed at xAI since January 2024, where he was involved in training the company’s chatbot Grok. According to xAI, the engineer is now using stolen information about cutting-edge features and capabilities not yet available at OpenAI in his new role. The lawsuit alleges that in July 2024, even before officially resigning from xAI, Li accepted an offer from OpenAI.

xAI claims that Li admitted to stealing data, and later, the company’s forensic experts discovered additional confidential files on his devices that he had failed to disclose. The company is seeking a ban on Li’s employment at OpenAI and demands compensation for damages.

On September 3, the court granted a temporary injunction, prohibiting Li from participating in chatbot training or discussing AI features and capabilities at his new workplace. This restriction will remain in effect until xAI confirms that all confidential data has been completely removed from his possession. The next hearing is scheduled for October 7.

This case comes amid escalating tensions between the two companies — and between Elon Musk and OpenAI itself, following Musk’s departure from its board of directors in 2018. Recently, xAI also filed a lawsuit against Sam Altman’s company and Apple, criticizing the integration of ChatGPT into the iPhone operating system. According to xAI, this move hinders fair competition, limits innovation, and prevents users from making informed choices.