xAI Sues OpenAI: Former Best Friends Enable Massive Law Firm Billings
September 30, 2025
This essay is the work of a dumb dinobaby. No smart software required.
What lucky judge will handle the new dust up between two tech bros? What law firms will be able to hire some humans to wade through documents? What law firm partners will be able to buy that Ferrari of their dreams? What selected jurors will have an opportunity to learn or at least listen to information about smart software? I don’t think Court TV will cover this matter 24×7. I am not sure what smart software is, and the two former partners are probably going to explain it is somewhat similar ways. I mean as former partners these two Silicon Valley luminaries shared ideas, some Philz coffee, and probably at a joint similar to the Anchovy Bar. California rolls for the two former pals.
When two Silicon Valley high-tech elephants fight, the lawyers begin billing. Thanks, Venice.ai. Good enough.
“xAI Sues OpenAI, Alleging Massive Trade Secret Theft Scheme and Poaching” makes it clear that the former BFFs are taking their beef to court. The write up says:
Elon Musk’s xAI has taken OpenAI to court, alleging a sweeping campaign to plunder its code and business secrets through targeted employee poaching. The lawsuit, filed in federal court in California, claims OpenAI ran a “coordinated, unlawful campaign” to misappropriate xAI’s source code and confidential data center strategies, giving it an unfair edge as Grok outperformed ChatGPT.
After I read the story, I have to confess that I am not sure exactly what allegedly happened. I think three loyal or semi-loyal xAI (Grok) types interviewed at OpenAI. As part of the conversations, valuable information was appropriated from xAI and delivered to OpenAI. Elon (Tesla) Musk asserts that xAI was damaged. xAI wants its information back. Plus, xAI wants the data deleted, payment of legal fees, etc. etc.
What I find interesting about this type of dust up is that if it goes to court, the “secret” information may be discussed and possibly described in detail by those crack Silicon Valley real “news” reporters. The hassle between i2 Ltd. and that fast-tracker Palantir Technologies began with some promising revelations. But the lawyers worked out a deal and the bulk of the interesting information was locked away.
My interpretation of this legal spat is probably going to make some lawyers wince and informed individuals wrinkle their foreheads. So be it.
- Mr. Musk is annoyed, and this lawsuit may be a clear signal that OpenAI is outperforming xAI and Grok in the court of consumer opinion. Grok is interesting, but ChatGPT has become the shorthand way of saying “artificial intelligence.” OpenAI is spending big bucks as ChatGPT becomes a candidate for word of the year.
- The deal between or among OpenAI, Nvidia, and a number of other outfits probably pushed Mr. Musk summon his attorneys. Nothing ruins an executive’s day more effectively than a big buck lawsuit and the opportunity to pump out information about how one firm harmed another.
- OpenAI and its World Network is moving forward. What’s problematic for Mr. Musk in my opinion is that xAI wants to do a similar type of smart cloud service. That’s annoying. To be fair Google, Meta, and BlueSky are in this same space too. But OpenAI is the outfit that Mr. Musk has identified as a really big problem.
How will this work out? I have no idea. The legal spat will be interesting to follow if it actually moves forward. I can envision a couple of years of legal work for the lawyers involved in this issue. Perhaps someone will actually define what artificial intelligence is and exactly how something based on math and open source software becomes a flash point? When Silicon Valley titans fight, the lawyers get to bill and bill a lot.
Stephen E Arnold, September 30, 2025
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