Elon Musk’s xAI Sues Ex-Engineer Over Stolen Grok AI Secrets

Elon Musk’s artificial intelligence company xAI filed a lawsuit on August 28, 2025, in the U.S. District Court for the Northern District of California, accusing former engineer Xuechen Li of stealing trade secrets and violating the Computer Fraud and Abuse Act. Li joined xAI on February 26, 2024, as a member of the technical team, where he contributed to the development of the xAI Grok AI application and gained access to its core proprietary and commercial information.

Between June and July 2025, Li sold approximately $7 million worth of xAI stock before resigning on July 28, and on August 19 he joined OpenAI. After the discovery, Li retained legal counsel, but according to xAI, logs confirmed Li had taken the entire xAI codebase, an act Li has since admitted.

The company seeks a range of relief, including a temporary restraining order, surrender of devices within 14 days, forensic examination, return and permanent deletion of copies, a device access ban, and a prohibition on generative AI work at OpenAI or any competitor, along with various damages.