Elon Musk’s firm xAI has sued its former employee, Xuechen Li. He is accused of stealing the confidential files before leaving xAI to join OpenAI, the company claims. Li had copied sensitive company information from his work laptop onto personal devices, according to the lawsuit. xAI alleges the files included advanced artificial intelligence tech that is better than the one that powers ChatGPT.
Allowing these secrets to fall into the hands of rivals could inflict enormous harm, the company argues. Competing companies could save billions of dollars and years of labor. xAI contends that this would give OpenAI or another group an unfair head start in the race to build the most powerful AI.
The lawsuit also claims Li attempted to cover his tracks. He renamed files, compressed them, and deleted his browser history and system logs. xAI found the suspicious activity on Aug. 11 as part of a periodic review of its security software. The company called on Li to come back and delete the stolen data the same day. Li then hired a lawyer. In a subsequent meeting, the xAI algorithm says, Li confessed to stealing the files and covering his tracks. But the company says that he has not provided unfettered access to his accounts and his stored information in the cloud.
Li graduated with a PhD in computer science from Stanford in 2024. He was an early employee at xAI and helped develop Grok, the company’s advanced AI model. He had sold shares of xAI totaling $6.7 million in the months before departing. Three days after the theft is said to have occurred, he resigned to begin work at OpenAI on Aug. 19.
xAI has sought a restraining order from the court. Now it wants Li to give back any company material, open all his devices and accounts to it, and agree not to work with OpenAI or any rival while the case is pending. The company is asking for money damages as well, though it has not specified a dollar amount.
The case brings the AI industries to a point where they are hotly competing to recruit top talent. Some scientists are receiving offers worth hundreds of millions of dollars. Musk has previously butted heads with OpenAI in other suits alleging that OpenAI seeks to monopolize the AI field. The new case pours gasoline on the fire.
In Silicon Valley, it’s common for workers to take jobs with different companies. But one thing that is not permissible is appropriating confidential files. xAI thinks Li stepped over that line. This lawsuit is a new twist in the ongoing drama playing out between Musk’s xAI and OpenAI.
