A federal judge dismissed a lawsuit filed by Elon Musk's artificial intelligence company, xAI, against OpenAI, which accused OpenAI of stealing trade secrets related to its Grok chatbot. U.S. District Judge Rita Lin ruled that xAI did not provide sufficient evidence that OpenAI improperly acquired confidential information from former xAI engineer Xuechen Li during recruitment. The judge dismissed the lawsuit with prejudice, meaning the claims cannot be refiled, stating that further amendments would be 'futile.'
The lawsuit, filed in September, claimed that OpenAI misappropriated confidential information from departing xAI employees. After an earlier version of the complaint was dismissed in February, xAI narrowed its allegations to focus on a presentation given by Li while OpenAI was recruiting him. xAI argued that OpenAI sought information about the development of Grok 4, asserting that OpenAI's upcoming ChatGPT updates were struggling to compete with Grok's capabilities.
Judge Lin rejected this argument, stating that discussions about a candidate's prior work are standard in recruitment and do not imply an attempt to obtain trade secrets. The court found no evidence that OpenAI induced Li to disclose confidential information or that OpenAI employees were aware of any proprietary information being shared. OpenAI maintained that Li never worked for the company and that it did not acquire xAI trade secrets.
OpenAI described the lawsuit as baseless and part of Musk's ongoing campaign against the company. This ruling adds to Musk's legal challenges against OpenAI, including a recent case where a federal jury dismissed Musk's claims that OpenAI abandoned its original nonprofit mission for profit. The jury concluded that Musk's claims were filed too late. Musk's AI startup xAI competes directly with OpenAI's ChatGPT through its Grok chatbot.