Elon Musk’s xAI Files Lawsuit Against OpenAI for Proprietary Technology Theft
Elon Musk’s artificial intelligence company xAI has taken legal action against rival OpenAI, alleging a “coordinated, unfair, and unlawful campaign” to steal proprietary technology through targeted employee poaching. The federal lawsuit, filed in California, accuses OpenAI of inducing former xAI employees to misappropriate the company’s entire source code, training methods, and data center deployment strategies.
Background
Musk, a co-founder of OpenAI in 2015, stepped down from the board in 2018 due to conflicts of interest with Tesla. Since then, he has been in a legal battle with OpenAI, including a separate lawsuit filed last month.
Allegations Against OpenAI
The lawsuit claims that OpenAI recruiter Tifa Chen targeted multiple xAI employees, offering lucrative packages to engineers who then allegedly stole source code and uploaded it to personal devices shortly after communication. One engineer, Xuechen Li, was accused of uploading the entire xAI source code base to a personal cloud account, later confessing to misappropriating the code and presentation materials.
Another engineer, Jimmy Fraiture, reportedly transferred confidential source code multiple times using AirDrop after joining OpenAI. An unnamed senior finance executive also allegedly took xAI’s “secret sauce” to OpenAI, refusing to sign termination documents when confronted about confidentiality obligations.
Legal Analysis
Legal experts have weighed in on the case, noting that the focus on employee poaching raises questions of trade secret misuse. xAI seeks damages, restitution, and injunctions requiring OpenAI to remove xAI material from its systems.
This lawsuit adds to Musk’s ongoing legal battles, including an antitrust suit against Apple and OpenAI for alleged market dominance through exclusive iPhone integration.