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Another day, another lawsuit from Elon Musk’s xAI. After filing a suit against OpenAI and Apple earlier this week, arguing that the companies are “monopolists,” xAI is now suing one of its own former employees for stealing trade secrets it says could benefit competitors.
In a new filing in a California federal court, the AI startup claims that former employee Xuechen Li was “willfully and maliciously copying xAI Confidential Information” and “trade secrets from his xAI-issued laptop to one or more non-xAI physical or online storage systems within his personal control.” xAI develops X’s in-house chatbot Grok, which competes with tools like OpenAI’s ChatGPT.
The suit alleges that this misappropriated data “could be used by xAI’s competitors, such as OpenAI, and/or foreign entities to preempt xAI’s product offerings and market expansions, and understand and use its current and in-development product features to strengthen their own AI model.” It claims access to such data would give a “potentially insurmountable competitive advantage” in the AI race.
Li, who had received roughly $7 million in stock options at the time of his departure, worked on the company’s engineering team and had access to much of Grok’s proprietary data.
In addition, the startup’s lawyers claim that Li took “extensive measures” to conceal his actions, including deleting his browser history and system logs, as well as renaming and compressing files before uploading them to his personal device.
Working with high-value intellectual property may be becoming a risky proposition at some tech firms. Just in the past few months, we’ve seen other lawsuits emerge where former employees have faced legal action for sharing trade secrets.
Earlier this month, Apple filed a suit against a former engineer on its Apple Watch team for allegedly downloading confidential data before taking up a new position at consumer tech rival Oppo, and for lying about the circumstances surrounding his departure.
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