US court throws out Elon Musk and xAI's claim that OpenAI stole trade secrets

OpenAI

• Judge dismisses xAI's trade secrets lawsuit against OpenAI
• xAI can file an amended complaint by March 17
• OpenAI calls the lawsuit part of Musk's ongoing campaign

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A US federal judge has dismissed a lawsuit brought by xAI, the artificial intelligence startup founded by Elon Musk, against rival OpenAI.

In a ruling issued on Tuesday, US District Judge Rita Lin sided with OpenAI’s request to dismiss the complaint. The lawsuit had accused OpenAI of poaching former xAI employees in an effort to obtain trade secrets linked to Grok, xAI’s flagship chatbot.

Judge Lin wrote that the complaint lacked concrete allegations of wrongdoing by OpenAI itself. “Notably absent are allegations about the conduct of OpenAI itself,” she said, adding that xAI did not present facts indicating OpenAI induced employees to steal trade secrets or used any such information after hiring them.

Instead, the case leaned heavily on the fact that eight former xAI employees joined OpenAI around the same time. The court found that timing alone was insufficient to support claims of trade secret misappropriation.

However, the judge granted xAI until 17 March to file an amended complaint addressing the deficiencies outlined in the ruling. That leaves the door open for Musk’s company to attempt a more detailed case.

The dismissed lawsuit is the latest chapter in an increasingly bitter dispute between Musk and OpenAI chief executive Sam Altman. The two men cofounded OpenAI in 2015 before parting ways.

Over the past year, tensions have escalated into multiple legal battles. xAI previously sued OpenAI and Apple over alleged monopolistic practices. Separately, Musk has sued Altman and OpenAI, claiming the organisation strayed from its original nonprofit mission when it adopted a for-profit structure. OpenAI has countersued, accusing Musk of pursuing a “years-long campaign of harassment.” That case is scheduled for trial in April.

In a statement posted on X, OpenAI welcomed the dismissal and described the lawsuit as another front in Musk’s ongoing campaign. Lawyers for xAI did not immediately comment.

For now, OpenAI has secured an early courtroom victory. Whether xAI can revive its claims by amending the complaint will determine if this particular legal skirmish continues — or quietly fades in a feud that shows no sign of cooling.