US Judge Dismisses Elon Musk's xAI Lawsuit Against OpenAI

The Dismissal of the Lawsuit

A United States federal judge has dismissed a lawsuit by Elon Musk’s artificial intelligence company xAI that accused rival Sam Altman’s OpenAI of stealing trade secrets for chatbots.

US District Judge Rita Lin in San Francisco said on Monday that xAI failed to show that OpenAI induced former xAI senior engineer Xuechen Li to divulge confidential information related to its Grok chatbot, or that OpenAI engineers knew Li might have disclosed any.

The Lawsuit's Background

The lawsuit originally filed last September focused on broader alleged misappropriation of confidential information, including source code, by xAI employees who left for jobs at OpenAI.

Monday’s decision is Musk’s second legal loss against OpenAI in four weeks.

The Judge's Ruling

Lin dismissed the lawsuit with prejudice, saying it would be “futile” to continue. She dismissed an earlier version in February.

The amended complaint focused on a presentation that Li gave while OpenAI was recruiting him.

But the judge said asking job candidates to discuss their prior work was routine, and one could not infer that OpenAI pushed Li to leak anything confidential.

The Impact on xAI and OpenAI

OpenAI has said Li never worked for the company and that it never acquired xAI secrets.

In seeking dismissal, lawyers for OpenAI wrote: “OpenAI does not need or want anyone’s trade secrets, especially not from xAI, which is failing in the marketplace and hemorrhaging talent.”

Li is being sued separately by xAI and has denied wrongdoing.