The lawsuit was filed in a federal court in California: xAI claims that competitors lured away engineers and took code and internal know-how from the company. OpenAI responded that the claims are baseless.
The lawsuit was filed in a federal court in California: xAI claims that competitors lured away engineers and took code and internal know-how from the company. OpenAI responded that the claims are baseless.
The first details of the case were published in a Reuters article. According to the agency, the complaint was filed on September 25 and describes a «persistent pattern» of unfair competition by OpenAI, including the targeted hiring of people who had access to key xAI technologies.
The lawsuit names at least three former employees, including engineer Xuechen Li (who was previously sued by xAI), developer Jimmy Freyture, and a senior financial manager. xAI believes that the transfer gave the competitor parts of the source code, data center planning, and knowledge of the internal processes surrounding the Grok chatbot.
OpenAI denied the allegations. In a comment to the publication, the company stated that it is not interested in other people’s secrets and does not tolerate privacy violations, and called the new lawsuit a continuation of Musk’s «intimidation campaign.»
xAI says it learned of the extent of the problem after an internal investigation into Lee, who is accused of taking confidential materials out of the company before joining OpenAI, and now presents the incidents as part of a «broader pattern» of unfair competition.
The dispute deepens a long-standing conflict between Musk and OpenAI, which he co-founded. The parties are also litigating over OpenAI’s commercial transformation and its ties to Microsoft, as well as over Apple’s actions and app ratings — processes that are setting industry precedents around workforce mobility and know-how protection.
A court in Victoria, California, is to assess whether xAI’s materials provide sufficient grounds for a lawsuit under the articles of trade secret misappropriation and unfair competition. If the court accepts the plaintiff’s arguments, OpenAI could face disclosure of internal processes under discovery and potential restrictions on working with former employees of competitors.
Earlier in August, xAI filed a separate lawsuit against engineer Xuechen Li; OpenAI responded by calling the allegations baseless. Against the backdrop of the «race» of large models, the market is experiencing a surge in litigation: companies are more actively drawing up non-disclosure agreements, and courts are more often considering claims regarding the «poaching» of personnel, source code, and infrastructure developments.
Previously, dev.ua wrote about how xAI introduced Grok 4 Fast, a new version of its model that is faster and more efficient than the previous one. According to the company, Grok 4 Fast works as productively as Grok 4, but on average uses 40% fewer so-called «thinking tokens.»
