Elon Musk is not happy with OpenAI.  Musk, a co-founder of OpenAI, left the company in 2018.  While Musk says he left because OpenAI was leaving its roots by switching from a nonprofit to a for-profit company, OpenAI has a slightly different version of events. 

OpenAI says Musk floated the idea to “attach (OpenAI) to Tesla as its cash cow,” according to an email he sent the company’s board. 

“Tesla is the only path that could even hope to hold a candle to Google,” Musk wrote in 2018. Musk left the company after his proposal was rejected, saying the probability of success was zero and that he’d build his own artificial intelligence rival to surpass them.

Seven years later, Musk has xAI, and OpenAI is the market leader in AGI, thanks to ChatGPT. It has proven to be more than capable of holding a candle to Google’s artificial intelligence. 

Elon Musk and Sam Altman were close friends at one point. 

Elon Musk has a history of suing OpenAI

Image source: Kovac/Getty Images for Vanity Fair Since he left the company, Musk has accused OpenAI of abandoning its principles for profits. Those attacks escalated after the company partnered with Microsoft, OpenAI’s biggest investor. 

  • Musk filed a lawsuit in California in February 2024, accusing OpenAI of violating its nonprofit mission, but he withdrew that lawsuit in June.
  • In August 2024, Musk accused OpenAI in federal court of violating anti-racketeering laws because the company deceived him by saying that it would remain a nonprofit. 
  • In November 2024, Musk’s lawyers expanded on that lawsuit, accusing OpenAI and Microsoft of violating antitrust laws.
  • In January 2025, Musk petitioned a federal judge to block OpenAI from converting into a fully for-profit company.

Related: Elon Musk’s bid to dethrone OpenAI dealt yet another blow

OpenAI has denied Musk’s allegations at every turn, responding, “Now that OpenAI is the leading AI research lab and Elon runs a competing AI company, he’s asking the court to stop us from effectively pursuing our mission.”

xAI sues OpenAI for allegedly stealing trade secrets

“You can’t sue your way to AGI,” the company said.  On Wednesday, September 24, xAI sued OpenAI for allegedly poaching talent from xAI and stealing trade secrets in the process. 

xAI filed the lawsuit in the U.S. District Court for the Northern District of California.

According to the lawsuit: The desire to win the artificial intelligence race has driven OpenAI to cross the line of fair play. OpenAI violated California and federal law by inducing former xAI employees, including Xuechen Li, Jimmy Fraiture, and a senior finance executive, to steal and share xAI’s trade secrets. 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.

xAI sued former engineer Xuechen Li last year, accusing him of stealing confidential trade secrets related to its Grok chatbot and taking them to OpenAI. 

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More AI news: That lawsuit said Li took confidential information in July 2024, shortly after he accepted a job offer from OpenAI, and he sold $7 million in xAI stock. 

Fraiture was also an xAI engineer whom the company accuses of “harvesting xAI’s source code and airdropping it to his personal devices to take to OpenAI.”

Executives who have left xAI recently

  • xAI lost its general counsel, Robert Keele, who announced in August that he was stepping down after a little over a year on the job to spend more time with his family.
  • Raghu Rao, another senior lawyer who oversaw the company’s commercial legal affairs, left around the same time as Liberatore and Keele, according to the Journal.
  • Igor Babuschkin, a co-founder of xAI, announced his departure on August 13. 

OpenAI has the upper hand in the AI race

OpenAI did not immediately return a request for comment.  While OpenAI started the modern artificial intelligence race with the release of ChatGPT, the field has become extremely crowded since then.

Anthropic, Samba Nova, Scale AI, and Databricks are just a few of the companies that have eclipsed $1 billion in funding, like OpenAI and xAI. Databricks’ $19 billion in funding even eclipses xAI’s $12 billion, according to Forbes.

OpenAI far and away leads the pack, with nearly $64 billion in funding.

Meanwhile, Gemini has the backing of one of the biggest names in tech, Alphabet.