The race for top AI talent has spilled into the courts, as one top researcher is being accused of stealing trade secrets on his way out the door to a competitor.
In a lawsuit filed Thursday in federal court, xAI accused former employee Xuechen Li of taking confidential information and trade secrets before resigning from the company to join rival OpenAI.
The lawsuit alleges that after Li persuaded xAI to liquidate $2.2 million worth of his xAI shares, in addition to $4.7 million he received earlier in the summer, he “willfully and maliciously” copied documents from his xAI-issued laptop onto at least one personal system the same day that his roughly $7 million in cash became available.
The trade secrets allegedly stolen by Li include “cutting-edge AI technologies with features superior to those offered by ChatGPT and other competing products” that could save OpenAI and other competitors billions in research and development dollars and years of effort, the lawsuit states.
The lawsuit alleges Li took extensive measures to conceal his misconduct by deleting his browser history and systems logs, renaming files, and compressing them before uploading them to his personal system. xAI claims that he admitted in a handwritten document and verbally that he misappropriated xAI’s confidential information and that he tried to hide his theft.
Li, a Chinese national who lives in Mountain View, earned his doctorate in computer science from Stanford and joined xAI in early 2024. He was among roughly 20 early engineers working on the company’s Grok model, which granted him broad access to xAI’s proprietary information.
“It never fails to astonish me how much a small group of talented people working with extreme focus and intensity can achieve in a very short time,” Li tweeted to his over 14,000 X followers in July.
Li did not respond to a request for comment. OpenAI did not immediately respond to a request for comment on whether Li is still employed by the company.
Three days after allegedly uploading xAI’s data to his personal system and receiving millions in cash from the company, Li resigned from xAI on July 28. The lawsuit claims that Li accepted an offer prior to his resignation to join competitor OpenAI with a start date of Aug. 19.
After resigning, Li signed a document stating he had returned company property, deleted any copies, and would keep information confidential. xAI alleges those statements were false.
The dispute comes amid an increasingly frenzied AI talent war, where a handful of top tech companies are poaching employees from each other.
AI researchers are being recruited by Meta, Microsoft, Google and OpenAI as if they are superstar athletes, with some offers ranging into the nine-figures paid out over several years.