Elon Musk explains why xAI sued OpenAI over alleged trade secret theft

Max Headroom 2025.09.27 3 min read

Elon Musk has shared some context behind xAI’s lawsuit against rival OpenAI. News of the lawsuit emerged recently, with reports stating that Musk’s artificial intelligence startup was accusing OpenAI of systematically stealing trade secrets.

Musk shared his thoughts in a post on social media platform X.

xAI’s lawsuit

As noted in a Reuters report, xAI’s lawsuit alleged that OpenAI poached xAI engineers, pressured them to share confidential information, and gained access to the company’s code, business plans, and data center details.

“OpenAI is targeting those individuals with knowledge of xAI’s key technologies and business plans—including xAI’s source code and its operational advantages in launching data centers—then inducing those employees to breach their confidentiality and other obligations to xAI through unlawful means.

“By hook or by crook, OpenAI clearly will do anything when threatened by a better innovator, including plundering and misappropriating the technical advancements, source code, and business plans of xAI,” the lawsuit read.

The lawsuit comes on the heels of a legal complaint that xAI filed against Xuechen Li, a former xAI employee who left to work at OpenAI. The engineer was accused of stealing trade secrets. In its most recent filing, xAI also named “early xAI engineer” Jimmy Fraiture and a “senior finance executive” as persons of interest.

We sent them many warning letters, but they continued to cheat. Lawsuit was the only option after exhausting all others.

— Elon Musk (@elonmusk) September 25, 2025

Elon Musk’s comments

In his post on X, Elon Musk stated that xAI had been trying to communicate with OpenAI about the matter. However, the ChatGPT maker reportedly continued its illicit activities. “We sent them many warning letters, but they continued to cheat. Lawsuit was the only option after exhausting all others,” Musk wrote in his post.

OpenAI, for its part, claimed that xAI’s new lawsuit was just the latest in Elon Musk’s efforts to harass the company. “This new lawsuit is the latest chapter in Mr Musk’s ongoing harassment. We have no tolerance for any breaches of confidentiality, nor any interest in trade secrets from other labs,” an OpenAI spokesperson stated.

Elon Musk is one of the co-founders of OpenAI, and he also served as a key investor in the artificial intelligence startup when it was still operating purely as a nonprofit. Musk later departed the company, however, and he has since taken a very public stance against OpenAI’s shift to a for-profit entity, as well as the activities of its CEO, Sam Altman.

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