xAI alleges openAI stole trade secrets in high-stakes AI battle

Elon Musk’s artificial intelligence company xAI has taken rival OpenAI to court, accusing it of stealing trade secrets in the race to dominate the fast-growing AI industry. The lawsuit was filed on Wednesday in a federal court in California.

According to the complaint, OpenAI allegedly engaged in a “deeply troubling pattern” of hiring away former xAI employees to gain inside knowledge about its technology and operations. xAI claims that the information sought includes source code for its chatbot Grok and strategic details about building and running data centres.

The filing states that OpenAI targeted individuals with access to these confidential assets and persuaded them to breach their contractual obligations through unlawful means. Among those named is former xAI engineer Xuechen Li, who is accused of taking proprietary information to OpenAI. Li has not yet commented on the allegations.

The lawsuit also mentions that OpenAI recruited another former engineer, Jimmy Fraiture, and an unnamed senior finance executive. While Fraiture is not listed as a defendant, the complaint alleges that these moves were part of a coordinated effort to obtain xAI’s trade secrets. Attempts to reach Fraiture for comment were unsuccessful.

OpenAI rejected the accusations in a statement issued on Thursday. A company spokesperson described the case as “the latest chapter in Mr. Musk’s ongoing harassment” against OpenAI.

This case adds to a widening legal battle between Mr.Musk and OpenAI, the company he co-founded in 2015 before parting ways.Mr.Musk has separately sued OpenAI for shifting from a non-profit to a for-profit model, while OpenAI has filed its own countersuit accusing him of harassment.

In addition, xAI has filed another lawsuit in federal court against Apple, alleging that the tech giant conspired with OpenAI to suppress competing platforms. Apple has not yet responded to the claim.

The new dispute highlights the intense competition in Silicon Valley to recruit skilled talent and secure leadership in artificial intelligence, an industry that has drawn heavy global investment. With lawsuits involving some of the biggest names in technology Musk, OpenAI, and Apple the conflict underscores the high stakes in the race to develop next-generation AI tools.