xAI Sues Ex-Engineer for Stealing AI Secrets Before Joining OpenAI

Microsoft's In-House AI Models, Meta's Superintelligence Hits Turbulence, & AI Thought Control

Author

Andres Franco
September 03, 2025

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Here’s the latest from this week in AI:

  • Microsoft Debuts Its First In-House AI Models

  • Meta’s Superintelligence Labs Hits Early Turbulence

  • xAI Sues Ex-Engineer Over Stolen Secrets

  • AI Brings Thought-Control to Life

Microsoft has unveiled MAI-Voice-1 and MAI-1-preview, its first fully in-house AI models after years of leaning on OpenAI. MAI-Voice-1 can generate a full minute of speech in under a second and is already powering Copilot Daily and Podcasts, while MAI-1-preview is a text model focused on instruction following and everyday queries.

CEO Mustafa Suleyman claims MAI-1 rivals the best models in the world, though benchmarks are not yet public. The text model is currently live on LM Arena and through API testing, with broader rollout planned soon. The move signals Microsoft’s push to chart its own AI course while reshaping its partnership with OpenAI.

Source: Microsoft AI

Meta’s new Superintelligence Labs (MSL) is off to a rocky start, facing early staff departures and strained ties with data partner Scale AI. Reports say some researchers consider Scale’s data inferior despite Meta’s $14.3 billion investment, with several hires either leaving quickly or returning to OpenAI.

One high-profile case saw Shengjia Zhao nearly quit days after joining before being given the chief scientist role. The turmoil suggests that despite Meta’s big spending and aggressive talent poaching, building a stable team to deliver on Zuckerberg’s AI vision may prove harder than expected.

Source: Giz Guide

Elon Musk’s xAI has filed a lawsuit against former engineer Xuechen Li, accusing him of stealing trade secrets from its Grok model just days before selling $7 million in equity and resigning to join OpenAI. Li, one of xAI’s first 20 engineers, allegedly downloaded confidential files to personal devices and later tried to erase logs and rename files.

xAI claims Li admitted to taking the data during an August 14 meeting. The company is now seeking an injunction to block him from working at OpenAI or other competitors, along with monetary damages. The case highlights the escalating AI talent wars and raises the stakes in the already tense rivalry between Musk’s xAI and his former company.

Source: OfficeChai

How 433 Investors Unlocked 400X Return Potential

Institutional investors back startups to unlock outsized returns. Regular investors have to wait. But not anymore. Thanks to regulatory updates, some companies are doing things differently.

Take Revolut. In 2016, 433 regular people invested an average of $2,730. Today? They got a 400X buyout offer from the company, as Revolut’s valuation increased 89,900% in the same timeframe.

Founded by a former Zillow exec, Pacaso’s co-ownership tech reshapes the $1.3T vacation home market. They’ve earned $110M+ in gross profit to date, including 41% YoY growth in 2024 alone. They even reserved the Nasdaq ticker PCSO.

The same institutional investors behind Uber, Venmo, and eBay backed Pacaso. And you can join them. But not for long. Pacaso’s investment opportunity ends September 18.

Paid advertisement for Pacaso’s Regulation A offering. Read the offering circular at invest.pacaso.com. Reserving a ticker symbol is not a guarantee that the company will go public. Listing on the NASDAQ is subject to approvals.

UCLA engineers have developed a non-invasive brain-computer interface (BCI) that lets paralyzed users control robotic arms using EEG caps and AI. In trials, one participant completed robotic tasks in 6.5 minutes using the system, something not possible without it.

The AI decoder worked with a camera-based model to read movement intent in real time, helping participants move cursors and robotic arms nearly four times faster. This marks a major step toward practical BCIs that could power wheelchairs, communication tools, and smart homes.

Source: Eureka Alert

In Other News

U.S. markets opened September lower as rising government bond yields and political pressure on the Federal Reserve spooked investors. The Dow, S&P 500, and Nasdaq all fell, with banks and tech leading losses, while gold hit a record $3,549.40 an ounce and European yields climbed to multi-year highs.

Attention now turns to a court ruling on Trump’s bid to oust Fed governor Lisa Cook and Friday’s jobs report, which could sway rate-cut decisions. Alphabet jumped 8% after a judge limited but didn’t ban Google’s search deals, while oil rose on Ukrainian strikes and factory activity declined for a sixth straight month.

Source: The WSJ

Cool tools of the week from insidersedge.io

TradeUI - Platform for traders with options flow, technical analysis, etc.

SID Search - Search engine to find your files from any application

Bricabrac AI - Create an AI app within minutes

Abbot - Programmable smart assistant for customer success teams

Jobs To Check Out This Week On insidersedge.io

EMEA Head AI Fintech - Prospexis.io

Senior Technical Lead - ChainGPT

Applied ML Engineer - Hologram Labs

Machine Learning Engineer - FalconX

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