As hype around AI swirls, Tesla and xAI CEO Elon Musk says his rivals at OpenAI are trying to swipe his engineers with "massive compensation offers."

After The Information reported Wednesday that xAI is poaching Tesla's engineers, Musk responded on Twitter that Microsoft-backed OpenAI was actually trying to poach one of his machine learning scientists on Tesla's Autopilot team, Ethan Knight. But xAI managed to convince Knight to move over to its company, which is developing the Grok model, instead.

"Ethan was going to join OpenAI, so it was either xAI or them," Musk shared, adding: "They have been aggressively recruiting Tesla engineers with massive compensation offers and have unfortunately been successful in a few cases."

The Tesla CEO implied that the electric car company isn't short on AI staff despite an ongoing "talent war" with some moving around, sharing that Tesla's AI and autonomy team still has more than 200 engineers. Tesla is also bumping its AI engineers' compensation packages in an effort to stay competitive, according to Musk.

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"Tesla is increasing comp," Musk said, though that will only occur if staff achieve various "progress milestones" while on its AI engineering team.

As a software-heavy electric car company, AI talent is important to Tesla's automation push. The EV firm is continuing to promote its Autopilot and "Full Self-Driving" (FSD) features despite a massive Tesla Autopilot recall and a subsequent fix that still left some drivers feeling unsafe. Many Tesla drivers are impressed with their cars' FSD capabilities, however, and Musk recently made FSD demonstrations necessary to show all new Tesla buyers how it works. Tesla is also using the same AI video tech to power both its cars and its Optimus robot in development, and is building multiple types of AI chips as well.

After initially helping launch OpenAI nearly a decade ago, the Sam Altman-led company has since become one of Musk's public rivals. Back in November, Musk and Altman dunked on each other's AI models, with Altman likening Musk's Grok to "your Dad's dad" and Musk dissing ChatGPT by calling it a humorless "GPT-Snore."

And this year, Musk filed a lawsuit against OpenAI, alleging that it's violated its contract by becoming for-profit, cozying up with Microsoft, and closing off its tech and innovations from the public.