GPT-4o: While xAI's lawsuit paints a detailed picture of proprietary theft and the sanctity of confidential AI innovations, the entire episode is soaked in bitter irony.

Elon Musk’s IP Hypocrisy — Trade Secrets, AI Theft, and the Fantasy of Abolishing IP Law

by ChatGPT-4o

Elon Musk’s legal crusade against a former employee at xAI—accusing him of stealing trade secrets and defecting to OpenAI—should raise more eyebrows than just those of the presiding judge. While xAI's lawsuit paints a detailed picture of proprietary theft and the sanctity of confidential AI innovations, the entire episode is soaked in bitter irony. Musk, a vocal critic of intellectual property law who once publicly agreed with Jack Dorsey that we should “delete all IP law”, is now vigorously defending the very legal protections he sought to eliminate. The hypocrisy is as thick as it is revealing—particularly when viewed in the context of how AI companies, including Musk’s, have appropriated massive amounts of copyrighted content to build their tools.

The Lawsuit: A Familiar Tale of Trade Secrets

Filed on August 28, 2025, xAI’s complaint against former engineer Xuechen Li accuses him of misappropriating confidential materials, including “cutting-edge AI technologies with features superior to those offered by ChatGPT”. The company claims Li transferred this proprietary data to OpenAI after selling $7 million in xAI stock and preparing for a new role at the rival firm. The complaint emphasizes the vast investment xAI made in developing its Grok AI system and insists that its protection via trade secret law is essential for continued innovation.

Indeed, the complaint echoes familiar corporate concerns: safeguarding model weights, training data, system prompts, and the immense capital and labor invested in these AI systems. Yet what makes this lawsuit newsworthy is not its legal merit but its philosophical contradiction.

Musk’s Call to Abolish IP Law: Now Self-Refuted

Just months prior, Musk publicly endorsed Jack Dorsey’s call to “delete all IP law” on X (formerly Twitter). This provocative position seemed to align with Silicon Valley’s libertarian-infused ethos—where ideas are “free,” innovation is king, and intellectual property is a drag on progress.

But now, when it’s Musk’s IP on the line—his trade secrets, his neural architectures, his competitive advantage—he swiftly runs to the very legal system he dismissed as obsolete. The inconsistency is jarring: how can someone decry the legitimacy of intellectual property while invoking its most powerful statutes (like the Defend Trade Secrets Act) to defend his own turf?

This selective invocation of IP law suggests that for Musk and others in Big Tech, intellectual property protections are only valid when they serve their own commercial interests—not when they protect the rights of artists, researchers, or journalists.

The Apple Analogy: Why Courts Shouldn’t Buy “Innovation Exceptionalism”

There is a striking analogy to be drawn from another recent lawsuit: Apple vs. Oppo. In this case, Apple accuses a former engineer of stealing confidential sensor technology and delivering it to Oppo, a competing smartphone maker. Apple argues that the use of its trade secrets—regardless of whether they appear verbatim in the final product—provides an unfair competitive advantage and constitutes theft.

This reasoning resonates with authors, researchers, and creators whose works have been scraped by AI companies to train large language models (LLMs) without consent or compensation. As the Apple case demonstrates, theft is still theft, even if the end product is novel or “transformative.” The courts are recognizing that the source material used to fuel innovation deserves protection, no matter the form of the output.

If Apple’s hardware schematics and chip designs are worthy of legal recourse, so too are the copyrighted books, peer-reviewed articles, and artwork that fuel generative AI models like ChatGPT, Grok, Claude, and Gemini. The theft of knowledge—whether by a rogue engineer or by bots scraping the web—is a breach of ethics and law alike.

The Double Standard of AI Founders

What makes Musk’s stance particularly problematic is how it mirrors the broader duplicity of AI firms: they demand legal protections for their own outputs and models, while simultaneously undermining or ignoring the intellectual property of others. They deploy armies of lawyers to enforce non-compete clauses and trade secret protections, yet scoff at the idea that authors or musicians deserve the same deference when their work is ingested into datasets.

Musk suing OpenAI over the alleged theft of Grok’s proprietary features is, in essence, a lawsuit about unauthorized training inputs and unfair advantage—exactly the same claims made by The New York Times, Getty Images, and countless independent creators against AI developers. If it’s wrong for OpenAI to use Grok’s architecture or internal training methods, then it’s equally wrong for Grok—or ChatGPT or Gemini—to be trained on millions of books and articles without permission.

The Stupidity of "Delete All IP Law"

Finally, the idea that intellectual property laws should be abolished—a sentiment Musk publicly aligned with—is not just unworkable; it’s self-destructive. IP law is the cornerstone of innovation ecosystems, especially in knowledge-driven sectors like AI, pharmaceuticals, publishing, and media. Without IP protections, companies cannot safely share innovations, creators cannot sustain livelihoods, and courts cannot uphold fairness.

Suggesting we “delete all IP law” while actively invoking those same laws in court is not just hypocritical—it’s intellectually incoherent. It betrays a dangerous opportunism that undermines trust, consistency, and legal order in a field that increasingly governs the future of work, culture, and communication.

Conclusion and Recommendations

If Elon Musk truly believes in fairness and innovation, he must recognize that intellectual property law isn’t just for billionaires protecting billion-dollar models. It is also for creators, writers, artists, and journalists—many of whom have seen their life’s work turned into training fodder by the very companies that now invoke IP law when it suits them.

Recommendations:

1. For Creators and Rights Owners:

   • Demand legal clarity and licensing terms from AI companies.

   • Use collective rights management and licensing schemes to push back against unlicensed model training.

   • Cite precedents like Apple vs. Oppo and xAI vs. Li to reinforce your claim that unauthorized input theft is still theft.

2. For Legislators and Regulators:

   • Harmonize trade secret and copyright enforcement to reflect the reality of LLM development.

   • Close loopholes that allow companies to scrape data under vague “fair use” defenses.

   • Enforce symmetry in IP protection: what applies to model weights and training pipelines should also apply to books and images.

3. For Courts and Judges:

   • Recognize the hypocrisy in selective enforcement of IP rights.

   • Treat the theft of copyrighted works for AI training the same as the theft of trade secrets for chip design.

The Grok lawsuit, Apple vs. Oppo, and the debates around IP abolitionism all expose the need for consistency in how we treat intellectual capital. If innovators like Musk want protection for their ideas, they must also respect the rights of others. Anything less is not innovation—it’s theft.