TLDR:
xAI claims OpenAI poached engineers with insider access to Grok training methods and Colossus cluster strategies.
Lawsuit details theft of Grok source code, NVIDIA GPU deployment data, and data center scaling playbooks.
OpenAI recruiter allegedly used encrypted Signal chats to offer multi-million dollar packages to xAI staff.
xAI seeks injunction, destruction of stolen data, and full jury trial with punitive damages.
The battle for AI dominance has escalated. Elon Musk’s xAI has taken OpenAI to federal court, accusing it of orchestrating a plan to steal trade secrets and lure away key employees.
The lawsuit points to Grok model data, training techniques, and supercomputing strategies as the core of what was allegedly taken.
xAI claims these actions cost them millions and disrupted their roadmap. The case has drawn sharp attention from the tech community, given the rivalry between Musk and OpenAI co-founder Sam Altman.
Lawsuit Centers on Grok AI Model and Poached Staff
According to reporting by Ask Perplexity, xAI alleges OpenAI targeted employees with access to Grok model weights and training data.
The complaint states that OpenAI recruiters reached out using encrypted Signal chats, offering large financial incentives. xAI claims this led to theft of entire codebases, infrastructure documentation, and confidential scaling strategies.
One of the engineers named in the suit, Xuechen Li, allegedly uploaded Grok source code to personal storage and deleted logs.
The filing states he accepted a multi-million dollar offer from OpenAI shortly after. Another employee, Jimmy Fraiture, was accused of transferring infrastructure code via AirDrop before leaving for OpenAI.
The lawsuit also lists former xAI CFO Mike Liberatore, who reportedly had access to sensitive data center plans.
He declined to sign standard termination agreements and responded aggressively to confidentiality reminders, according to the filing. xAI argues these departures gave OpenAI insight into its competitive edge.
xAI claims at least five additional staff members working on Grok 4 and Colossus data centers were recruited away. These individuals allegedly had inside knowledge of NVIDIA GPU deployment, a key factor in xAI’s speed advantage.
The complaint links their departures to OpenAI’s recruiter, Tifa Chen, who is said to have offered bounties to induce theft.
🚨 BREAKING: xAI vs OpenAI
Elon Musk’s xAI has filed a major lawsuit against Sam Altman’s OpenAI in federal court, alleging a strategic campaign to steal trade secrets and poach employees with insider knowledge of the Grok AI model and Colossus supercomputing clusters.
We’ve… pic.twitter.com/Bf2usaqZcr
— Ask Perplexity (@AskPerplexity) September 26, 2025
xAI Seeks Injunction and Damages
The lawsuit seeks immediate injunctions to prevent OpenAI from using any of the alleged stolen information.
xAI is asking the court to order the return and destruction of data tied to Grok’s training and infrastructure methods. The company also requests a full jury trial to decide on damages.
xAI says it suffered economic harm, with disrupted product schedules and millions spent on forensic investigations. They argue that allowing the alleged theft to stand would weaken innovation incentives across the AI space.
Musk stated they issued warning letters before going to court but claimed OpenAI continued recruiting their staff.
The case is expected to put a spotlight on aggressive hiring practices across the AI industry. If successful, the ruling could set legal precedent for how trade secret protection applies to model training data and supercomputing operations. For now, both companies remain locked in a legal standoff.
