xAI has filed a lawsuit against a former engineer, accusing him of “willfully and maliciously” stealing xAI documents and seeking an emergency restraining order to prevent him from joining rival company OpenAI.
In a federal lawsuit filed on Thursday in the Northern District Court of California, xAI alleged that ex-employee Li Xuechen stole proprietary information of xAI’s advanced business model and trade secrets prior to leaving the company to work for competitor OpenAI.
xAI accuses Li of breach of contract, theft of trade secrets, fraud, and violation of California’s computer fraud statute, and seeks an emergency restraining order to prevent Li from working at OpenAI until the trade secrets issue is resolved.
Grok is xAI’s advanced large language model that competes with other models like OpenAI’s ChatGPT and Google’s Gemini.
At the same time, xAI said that Li took extensive measures to hide his actions, such as deleting browser history and system logs, renaming files, and compressing them before transferring them to his personal devices, it alleged.
On July 28, Li resigned from xAI, signing a termination certification stating he had complied with confidentiality agreements and returned or deleted all company data, xAI said.
However, xAI’s security team detected irregularities during a routine check, prompting an immediate internal investigation that pointed to Li, who was set to start at OpenAI on Aug. 19.
xAI and Li held two intense meetings with lawyers present. During one meeting, Li confessed to taking company documents and concealing his actions, documenting his "negligence" in a handwritten statement.