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3h ago

xAI Sues OpenAI Over Alleged Trade-Secret Theft Through Employee Poaching

The complaint portrays a coordinated hiring campaign to extract Grok source code alongside xAI’s rapid data‑center deployment methods.

Open AI and xAI logos are seen in this illustration taken on September 12, 2025. REUTERS/Dado Ruvic/Illustration/File Photo
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A 3D-printed miniature model of Elon Musk and the X logo are seen in this illustration taken January 23, 2025.

Overview

  • xAI filed the case in the U.S. District Court for the Northern District of California, alleging OpenAI induced former staff to bring over confidential materials.
  • The filing names ex‑employees Xuechen Li and Jimmy Fraiture plus an unnamed senior finance executive, citing source code and data‑center rollout know‑how as the targeted secrets.
  • xAI says it uncovered the alleged pattern while investigating Li in a separate case over purported exfiltration of confidential files tied to Grok.
  • OpenAI denied the accusations in a statement, calling the suit part of Elon Musk’s ongoing harassment and saying it has no interest in others’ trade secrets.
  • The lawsuit marks a fresh turn in the protracted Musk‑OpenAI legal rivalry and could test how courts balance trade‑secret protections against employee mobility in the AI sector.