Elon Musk’s artificial intelligence venture, xAI, has secured a temporary restraining order against one of its former employees, intensifying the competitive tensions in the AI industry. The order, issued by a U.S. judge in San Francisco, prevents ex-engineer Xuechen Li from working with or sharing information on generative AI at OpenAI, the company he recently joined.

xAI alleges that Li misappropriated sensitive trade secrets related to Grok, the company’s chatbot designed to rival and, in some respects, outperform ChatGPT. According to the complaint, Li was directly involved in the development of Grok before resigning. Soon after leaving, he liquidated around $7 million worth of company stock and accepted an offer from OpenAI, raising concerns about the transfer of proprietary knowledge.

The restraining order specifically bars Li from engaging in AI-related discussions with OpenAI staff, consultants, or partners. It will remain effective until xAI can confirm that all confidential materials in Li’s possession have been permanently deleted. A follow-up hearing is scheduled for October 7, where the court will decide whether the restrictions should be extended.

This legal battle underscores the high-stakes nature of the artificial intelligence sector, where leading companies are not only competing on technology but also on securing and protecting top talent. The case highlights the growing friction between Musk and OpenAI, whose split in 2018 over the direction of AI development continues to shape their rivalry.

Beyond the immediate dispute, the outcome could set important precedents for how trade secrets are handled in the fast-moving world of AI. As the industry expands, firms are becoming increasingly vigilant about safeguarding proprietary models, data, and algorithms that can provide a crucial edge in the global AI race.