xAI’s trade secret lawsuit against OpenAI has been dismissed

OpenAI has successfully convinced the court to dismiss the lawsuit filed by Elon Musk’s xAI, accusing the company of stealing its trade secrets. In her decision, US District Judge Rita F. Lin wrote that xAI’s complaint “does not point to any misconduct by OpenAI” and instead attributes all listed misconducts to its eight former employees who “ left for OpenAI at around the same time.”

Lin said that xAI accused two of its former employees of stealing its source code before leaving at a time when they were already speaking to an OpenAI recruiter. However, the company didn’t say if the recruiter told those former employees to do so. xAI’s lawsuit also accuses two other former employees of keeping their work chats on their devices even after leaving, another of refusing to provide certifications related to confidential information after his departure, and another of unsuccessfully trying to access xAI hiring and datacenter optimization information when he was already working for OpenAI.

“Notably absent are allegations about the conduct of OpenAI itself,” the judge noted. xAI didn’t include any information that directly accuses OpenAI of making those employees steal its trade secrets. It also didn’t include allegations that those former employees used any stolen trade secrets after they were already working for OpenAI. To be precise, OpenAI’s motion for dismissal was granted with leave to amend, so the lawsuit may not be completely over just yet. That means xAI can still file an amended complaint addressing what the judge wrote in her decision until March 17, 2026.

OpenAI and xAI have a longstanding feud, and this is just one of the several lawsuits between the two companies. In fact, Musk has an ongoing complaint against OpenAI and Microsoft, accusing the former of violating its nonprofit status. Musk, who was an early funder of OpenAI, is now asking the company for $79 billion to $134 billion in damages from “wrongful gains.”