Elon Musk’s artificial intelligence startup xAI has recently filed a lawsuit against their former engineer Xuechen Li for allegedly stealing trade secrets related to the Grok chatbot and providing them to xAI’s competitor, OpenAI.
According to The San Francisco Standard, xAI submitted a complaint to the California Federal Court on Thursday (August 28), accusing Li of stealing trade secrets that include cutting-edge AI technology superior to ChatGPT and other competitive products. These technologies could potentially save OpenAI and other competitors billions of dollars in research funding and several years of development time.
Li, a Chinese national residing in Mountain View, California, obtained a Ph.D. in computer science from Stanford University and joined xAI in early 2024.
The lawsuit alleges that Li took extensive measures to conceal his misconduct, such as deleting browser history and system logs, renaming files, compressing files, and then uploading them to his personal system. xAI claims that Li admitted in a handwritten document and verbally that he misappropriated xAI’s confidential information and attempted to cover up his theft.
Li resigned from xAI on July 28 and was slated to start working at OpenAI on August 19.
After resigning, Li signed a document stating he had returned company property, deleted all copied files, and would maintain confidentiality of company information. xAI contends that these statements are false.
Both Li and OpenAI have not responded to requests for comment from The San Francisco Standard.
Additionally, as reported by Reuters, the lawsuit states that Li began working as an engineer at xAI last year, assisting in training and developing Grok. xAI alleges that Li stole their trade secrets in July this year shortly before accepting OpenAI’s employment offer and selling approximately $7 million worth of xAI stocks.
This legal dispute underscores the fierce competition between Musk’s xAI and OpenAI, as well as the battle among tech companies for AI talent.
xAI suggests that these trade secrets could allow OpenAI to leverage xAI’s more innovative AI capabilities and imaginative features to enhance ChatGPT.
The lawsuit mentions that during a meeting on August 14, Li admitted to stealing xAI company documents and “covering his tracks.” xAI later discovered additional stolen data on his devices that he had not disclosed.
xAI is seeking unspecified monetary compensation from the court and a restraining order prohibiting Li from transitioning to OpenAI.