Musk's xAI loses trade secrets lawsuit against OpenAI
What's the story
A federal judge has dismissed a lawsuit filed by Elon Musk's artificial intelligence company, xAI. The suit accused rival tech firm OpenAI of stealing trade secrets for its chatbots. US District Judge Rita Lin in San Francisco ruled that xAI failed to prove that OpenAI had induced former xAI senior engineer Xuechen Li into disclosing confidential information related to its Grok chatbot.
Case history
Lawsuit can't be refiled
Judge Lin dismissed the lawsuit with prejudice, meaning it can't be refiled. She had also dismissed a previous version of the suit in February. The original lawsuit, filed in September, alleged broader misappropriation of confidential information including source code when xAI employees joined OpenAI. The latest ruling marks Musk's second legal defeat against OpenAI in four weeks.
Legal rebuttal
'Musk's ongoing campaign of harassment'
In response to the lawsuit, OpenAI said, "This baseless lawsuit was never anything more than yet another front in Mr. Musk's ongoing campaign of harassment." The company added that it had no interest in xAI's trade secrets. The amended complaint focused on a presentation Li gave while being recruited by OpenAI. Musk's company claimed that OpenAI sought secrets related to the July 2025 release of Grok 4, knowing its upcoming ChatGPT update "could not compete" on complex reasoning tasks.
Employment practices
Judge says normal practice to ask about previous work
Judge Lin noted that asking job candidates about their previous work is a normal practice. She said it wouldn't be fair to hold employers liable every time they ask about a candidate's past work experience. OpenAI has maintained that Li never worked for them and that they never acquired any trade secrets from xAI.