Elon Musk’s xAI has sued OpenAI, claiming that it stole trade secrets through targeted hires.

The company said that workers took with them the secret to rapidly deploying data centers, along with Grok source code and other information. OpenAI has rejected the claims.

“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 company claimed in its lawsuit.

Key to the claims over data center knowledge theft is an unnamed senior finance executive, who the company said had no prior experience with data centers or the AI industry at all.

"He jumped ship from his senior finance role at xAI to a new (and less prestigious) role at OpenAI working on spending strategy for OpenAI’s data center operations," the lawsuit claims, where it says he brought the "secret sauce" of "xAI’s business plans, data center deployment strategy, and related partner deals that are key to understanding xAI’s operational efficiency in launching new data centers."

The lawsuit adds: "The senior finance executive has, on multiple occasions, expressed a flagrant disregard for his confidentiality obligations to xAI, including through the crude sexual expletives he sent to xAI’s counsel when confronted about his theft of company trade secrets."

In a screenshotted email, the worker is shown telling xAI's counsel to "suck my d***" in response to the claims.

xAI noted a number of other hires by OpenAI of its staff, including Uday Ruddarraju, Sreekanth Pothanis, Mike Dalton, Hieu Pham, and Ethan Knight.

"As with all the other xAI employees discussed above, OpenAI did not merely hire them because it needed additional manpower, but instead targeted these employees based on their access to particular xAI Confidential Information. For example, Ruddarraju and Pothanis were involved in xAI’s Supercompute Division, with access to sensitive xAI Confidential Information regarding the deployment of the very same Nvidia GPUs used in xAI’s data centers that OpenAI wants to heavily rely upon for its business.

"Deployment of these GPUs is an important part of xAI’s data center operations, which, as noted above, are widely recognized in the industry as a key competitive differentiator."

OpenAI said that the lawsuit was baseless and just one of many from xAI CEO Elon Musk.

“This new lawsuit is the latest chapter in Mr Musk’s ongoing harassment," the company said in a statement. "We have no tolerance for any breaches of confidentiality, nor any interest in trade secrets from other labs."

Musk was one of a number of co-founders of OpenAI and helped fund it when it was fully non-profit, but fell out with Sam Altman when the company began to grow and shifted to a for-profit model.