Tesla, Inc. is facing off against one of its former engineers and a robotics startup in a newly filed trade secret lawsuit that underscores the escalating competition in the artificial intelligence arena. In the complaint that it filed on June 11 in the U.S. District Court for the Northern District of California, Tesla accuses Palo Alto-based Proception, Inc. and its co-founder Zhongjie “Jay” Li of engaging in a “calculated effort to exploit Tesla’s investments, insights, and intellectual property” tied to its humanoid robotics program, Optimus.
According to its 20-page complaint, Tesla alleges that Li, who previously worked on key components of Optimus, improperly accessed and downloaded highly sensitive design files, actuator specifications, sensor data, source code, and prototype videos in the weeks leading up to his September 2024 departure from the company. Tesla asserts that many of these materials related specifically to the highly complex design of Optimus’ robotic hands — a system requiring years of engineering, millions of dollars in R&D, and intricate trade secret-protected designs to achieve precise human-like movement.
Tesla claims in the lawsuit that while still employed (and after being reassigned away from its robotic hand division), Li accessed and downloaded large volumes of confidential material outside the scope of his employment, sometimes using personal smartphones in violation of Tesla’s mobile device policy. On his final day with the company, Li allegedly continued accessing Tesla’s internal SharePoint system into the evening hours, obtaining additional files just hours before his departure.
Less than one week after leaving Tesla, Li incorporated Proception, which Tesla says is now marketing highly advanced robotic hand technology to potential customers and investors. In March 2025 – only five months after its formation – Proception publicly claimed to have “successfully built” humanoid robotic hands and indicated that it would begin shipments to research clients within nine months. Tesla asserts that such rapid progress is “implausible” absent the use of its misappropriated trade secrets, noting that Optimus’ own development required over four years, hundreds of engineers, and billions of dollars in investment.
In support of its claims, Tesla points to publicly available footage of Proception’s prototypes, which the automaker says reveal “striking similarities” in movement and design to the hand systems developed for Optimus. The electric automaker contends that Proception’s use of the stolen data allowed it to bypass the time, capital, and expertise otherwise required to build viable humanoid robotics, unfairly accelerating its entry into the highly competitive robotics market.
Tesla describes its Optimus project as a cornerstone of its next-generation AI platform, envisioning the bi-pedal humanoid as capable of performing a broad range of tasks – from caregiving to manufacturing – designed to augment or replace human labor across industries. Among the most technically challenging aspects, Tesla says, is the robotic hand, which must balance sensitivity, range of motion, weight, and grasp strength, a balancing act Tesla’s head of robotics publicly detailed as recently as late 2024.
With these claims in mind, Tesla sets out claims under the Defend Trade Secrets Act and the California Uniform Trade Secrets Act. Its lawsuit also includes tortious interference with contract and quasi-contract/unjust enrichment causes of action. Tesla is seeking injunctive relief, including the return and destruction of all confidential information, as well as compensatory and exemplary (punitive) damages for what it characterizes as willful and malicious misappropriation.
THE BIGGER PICTURE: Tesla’s lawsuit arrives amid a growing surge of trade secret litigation, particularly in AI and robotics, as companies fight to protect increasingly valuable proprietary algorithms, models, and designs. As the artificial intelligence arms race accelerates, courts are seeing a rise in disputes over employee departures, startup formation, and the fine line between lawful experience and unlawful misappropriation. “Innovation must be earned, not stolen,” Tesla states in its filing, a sentiment increasingly echoed across industries where trade secrets serve as a primary line of competitive defense.
The case is Tesla, Inc. v. Proception, Inc. and Zhongjie Li, 5:25-cv-04963 (N.D. Cal.).
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