OpenAI Inc. has asked a United States federal judge to dismiss a lawsuit filed by Elon Musk’s AI startup, xAI, which alleged employee poaching and trade secret theft.

In Thursday’s court filing, OpenAI called the claims “baseless,” asserting the lawsuit is aimed at generating publicity and intimidating former xAI employees who left to pursue other roles in the AI sector.

The development intensifies a high-profile legal battle between two major players in the generative AI market, underscoring rising competition over talent and intellectual property.

“This case is clearly designed to generate publicity to bully and threaten those employees who exercised their right to leave and work elsewhere in the AI industry and to try to chill further flight from xAI,” the filing said, according to Bloomberg.

“Unable to match OpenAI’s innovation, xAI has filed this groundless trade secret lawsuit,” OpenAI’s lawyers said. “To be clear, OpenAI does not need or want anyone’s, much less xAI’s, trade secrets to achieve OpenAI’s mission.”

OpenAI stressed that employees leaving xAI were exercising their legal rights and that the company is fully entitled to hire them.

xAI, launched by Elon Musk as a competitor in the fast-growing generative AI market, filed the lawsuit last week in federal court in San Francisco.

The startup alleges that OpenAI recruited at least eight of its employees to gain access to proprietary information about xAI’s chatbot, Grok, which xAI claims is more advanced than OpenAI’s ChatGPT.

xAI characterized OpenAI’s hiring practices as a “deeply troubling pattern” intended to acquire competitive AI secrets.

OpenAI, however, dismissed the allegations as false and without merit.

“Under Musk’s leadership, talented xAI employees are leaving in droves, and some are coming to OpenAI to help advance OpenAI’s mission,” OpenAI said in its filing.