lon Musk has suggested that the former xAI engineer sued by the company for downloading its secret data hadn’t just taken a few files or bits of information — he claims the situation was far more serious.
Musk alleged that Xuechen Li uploaded xAI’s entire codebase. “He accepted an offer at OpenAI and then uploaded our entire codebase!” Musk wrote on X. This would mean Li had access to essentially all of xAI’s work so far, which he could have attempted to take to OpenAI, where he had accepted a job offer.
Earlier in the week, xAI sued Li for allegedly stealing its confidential technology and attempting to take it to OpenAI. The company said Li unexpectedly cashed out a large amount of his xAI stock and immediately resigned. He then allegedly copied confidential xAI information to his personal laptop and tried to cover his tracks by deleting his browser history and other logs. According to xAI, the stolen technology could have enabled OpenAI to create a product superior to ChatGPT.
Li completed his PhD in Computer Science at Stanford in 2024 and was among the first 20 employees at xAI. He had been working on developing and training Grok, xAI’s advanced AI model. In June 2025, Li sold $4.7 million worth of his xAI shares. Seeking more liquidity, he sold an additional $2 million of stock to xAI the following month.
xAI alleges that on July 25, 2025 — the same day Li received cash proceeds from the stock sale — he copied the company’s “confidential information” and “trade secrets” from his work-issued laptop to “non-xAI physical or online storage systems under his personal control.” The company claims Li took extensive measures to conceal his misconduct, including deleting browser history and system logs, renaming files, and compressing them before uploading them to his personal devices.
Three days later, Li resigned. He had already accepted an offer from OpenAI and was slated to begin work there on August 19. xAI says it discovered Li’s actions on August 11 during a routine review of logs from its security software designed to detect and prevent data exfiltration. That same day, xAI emailed Li, demanding he return and delete the data. At this point, Li reportedly hired a criminal attorney. During a meeting between xAI’s lawyers and Li’s attorneys, Li allegedly admitted to intentionally taking xAI’s files and covering his tracks. He allowed xAI to create copies of his personal laptops for examination, but the company says he has withheld passwords for critical accounts that could reveal the full scope of the theft.
Elon Musk now says that Li was in possession of xAI’s entire codebase. xAI’s codebase would include all the code at the company that was used in building its many models, and likely many algorithmic tricks that xAI engineers would’ve come up with to set themselves apart from the competition. Musk alleges that Li intended to take all of these to OpenAI, and xAI in its lawsuit had said that this information could’ve been used to build models superior to ChatGPT. AI Model companies are worth hundreds of billions of dollars, and most of their value lie in the code and weights that power their models. And protecting this code likely ought to be one of the biggest priorities — with researchers switching labs all the time, the risk of someone taking their code to a rival must be the one of their biggest existential risks.