xAI's trade secret lawsuit against OpenAI has been dismissed
Source: Engadget
OpenAI has successfully convinced the court to dismiss the lawsuit filed by Elon Musk’s xAI, which accused the company of stealing its trade secrets. In her decision, U.S. District Judge Rita F. Lin wrote that xAI’s complaint “does not point to any misconduct by OpenAI” and instead attributes all listed misconduct to eight former xAI employees who “left for OpenAI at around the same time.”
Judge’s Findings
- xAI alleged that two former employees stole source code before leaving, while they were already in contact with an OpenAI recruiter. The complaint did not state whether the recruiter instructed them to do so.
- Two other former employees were accused of keeping work chats on their personal devices after departure.
- One former employee allegedly refused to provide certifications related to confidential information after leaving.
- Another former employee was said to have unsuccessfully tried to access xAI hiring and datacenter‑optimization information while already employed by OpenAI.
Judge Lin noted that “Notably absent are allegations about the conduct of OpenAI itself.” The complaint did not directly accuse OpenAI of prompting the employees to steal trade secrets, nor did it allege that the former employees used any stolen information after joining OpenAI.
Dismissal with Leave to Amend
OpenAI’s motion to dismiss was granted with leave to amend, meaning the lawsuit is not necessarily over. xAI may file an amended complaint addressing the judge’s concerns by March 17, 2026.
Broader Context
The dispute is part of a longstanding feud between OpenAI and xAI. Musk has also filed an ongoing complaint against OpenAI and Microsoft, alleging violations of OpenAI’s nonprofit status and seeking $79 billion to $134 billion in damages for “wrongful gains.”