As you’re probably well aware by now, Elon Musk and Sam Altman have a long history. The two cofounded OpenAI back in 2015 as a nonprofit with an ostensibly altruist mission. But then Musk stormed out of the company three years later. Reportedly, it was because he beefed with Altman’s leadership.
There’s been bad blood between them ever since — a lot of which has been playing out in the courts.
In 2024, Musk sued OpenAI and Altman for violating its founding principles by pursuing profits over the public good. As the lawsuit dragged on, he then tried to get a federal judge to block OpenAI’s restructuring from a non-profit into a purely for-profit company. The judge swatted down Musk’s plea, but OpenAI has since given up on becoming an out-and-out for-profit. It’s now trying to convert into a public benefit corporation, but with similar struggles that are tying up billions of dollars in cash it needs from its investors.
For whatever reason, Musk dropped the original suit — but is now suing Altman and his company again for basically the same reason.
If that series of moves from Musk reek of jealousy that his friend-turned-foe now commands the most important AI company in the world which is being valued at half a trillion dollars, a brand new lawsuit filed this week by Musk’s company xAI seems driven by rage that Altman keeps poaching his talent.
As The Guardian reports, the suit filed in a California court accuses OpenAI of a “deeply troubling pattern” of hiring former xAI employees to gain access to its trade secrets, including the source code behind its prized chatbot Grok. Seemingly, OpenAI is just dying to know how to make an AI that goes haywire and starts calling itself “MechaHitler.”
“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,” the lawsuit alleges, per the newspaper.
Hiring a rival’s ex-employees isn’t illegal in itself, but it is at least one way of conducting corporate espionage. An aggrieved corporation would have to prove that there’s a concerted, systematic effort to snipe a rival’s talent, however, which is what Musk and xAI are alleging.
The allegations emerged from xAI investigating its former engineer Xuechen Li for stealing trade secrets. Amid that probe, Musk’s company says it uncovered a “deliberate scheme” to steal these secrets by hiring eight former xAI employees, per The Information.
Along with Li, OpenAI also poached former xAI engineer Jimmy Fraiture and another senior finance executive, the company alleged.
That accused finance executive didn’t take kindly to the allegations. When Musk’s lawyer sent them an email accusing them of breaching their confidentiality agreement, according to a screenshot in the lawsuit, they had a one sentence rebuttal.
“Suck my dick,” the employee responded.
In not quite those same words, OpenAI also denied the allegations, calling it the “latest chapter in Mr Musk’s ongoing harassment.” Along with the lawsuits already mentioned, Musk is also suing OpenAI and Apple, accusing the two companies last month of colluding to keep ChatGPT at the top of the App Store while stopping its Grok app from climbing the charts.
While we wouldn’t put it past OpenAI, a company that so nakedly dropped its open-source and non-profit act the second it smelled Microsoft money, of engaging in nefarious practices, it’s pretty rich for Musk to be mad about his employees fleeing to competitors, innocently or otherwise. He’s notorious for rage-firing employees on the spot and treating the ones that don’t worship the ground he walks on poorly. He’s conducted brutal layoffs at his social media platform X — Grok’s stomping ground lately — and recently fired 500 xAI employees, replacing a Musk-company veteran in charge of the chatbot’s data annotation team with a literal college kid.
Big picture-wise, if the major AI firms that are all running up against the same wall in trying to improve their constantly hallucinating tech are just hiring each other’s cast-offs, if you have to wonder if the industry’s going nowhere fast.
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