Tesla CEO Elon Musk's AI startup xAI has filed a lawsuit against rival OpenAI, alleging theft of trade secrets through hiring its former employees.
Intensifying the ongoing conflict between Musk and OpenAI CEO Sam Altman, a complaint was filed in California federal court that former xAI employees were poached to obtain confidential information related to its AI chatbot Grok.
The lawsuit alleged that OpenAI targeted individuals familiar with xAI’s source code and encouraged them to violate confidentiality agreements and divulge information regarding xAI’s operational advantages in launching data centres.
According to multiple media reports, the lawsuit names former xAI engineer Xuechen Li, who is already involved in a separate case with the company, along with ex-employee Jimmy Fraiture and an unnamed senior finance executive.
The case marks the latest legal action Musk has initiated against OpenAI, which he co-founded with Altman in 2015 before departing in 2018 following an unsuccessful attempt to gain control.
Musk previously attempted to block the AI startup’s plans to convert to a for-profit enterprise, and he accused Altman of violating OpenAI’s founding principles by collaborating with Microsoft. OpenAI asserted that Musk previously endorsed a for-profit model and is now retaliating out of jealousy.
Musk filed a suit against OpenAI and Apple last month, alleging anti-competitive behaviour and claiming that Apple preferred ChatGPT in its app store.
Apple denied allegations that its App Store algorithms or curated lists favour ChatGPT over Musk’s offerings.
“The App Store is designed to be fair and free of bias,” the company insisted, adding that recommendations are based on charts and algorithms.
Tech giants and well-funded startups in Silicon Valley are intensifying competition for AI expertise, announcing bonuses to attract talent. Altman recently lost several key researchers to Meta, while Musk's xAI is also seeking to attract talent.
India is OpenAI’s second-largest market in the world after the US, and it may well become its biggest market in the near future, according to its CEO Altman.
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