A California federal judge has dismissed a lawsuit brought by Elon Musk’s AI startup xAI, accusing OpenAI of poaching staff to steal trade secrets.
In a ruling released on Tuesday, US District Judge Rita Lin sided with a request to dismiss the case filed by the Sam Altman-led AI company behind ChatGPT, citing the lack of evidence against it.
“Notably absent are allegations about the conduct of OpenAI itself,” Lin wrote in her order. “xAI does not allege any facts indicating that OpenAI induced xAI’s former employees to steal xAI’s trade secrets or that these former xAI employees used any stolen trade secrets once employed by OpenAI.”
Instead of pointing to “misconduct” by OpenAI, xAI cited “eight former xAI employees who left for OpenAI at around the same time,” the judge said.
Lin gave xAI until March 17 to file an amended complaint “correcting the deficiencies” outlined in her order — giving Musk’s company a chance to try again.
Attorneys for both xAI and OpenAI did not immediately respond to Business Insider’s requests for comment on Tuesday.
The dispute had marked the latest escalation in the growing legal feud between tech billionaires Musk and Altman.
Last year, xAI sued Apple and OpenAI, accusing them of monopolistic behavior. Musk has also separately sued Altman and OpenAI — the company the two men cofounded in 2015 — over claims that it betrayed its nonprofit mission by shifting into a for-profit structure. OpenAI countersued, accusing Musk of a “years-long campaign of harassment.” That case is scheduled to go to trial in April.
In the lawsuit that was dismissed on Tuesday, Musk’s company alleged that OpenAI engaged in a “deeply troubling pattern” of recruiting former xAI employees to gain access to confidential information related to Grok, xAI’s flagship chatbot.
In an amended complaint filed last year, xAI accused rival OpenAI of violating California and federal law by “inducing” several ex-employees to “steal and share xAI’s trade secrets.”
“Threatened by xAI’s innovations, OpenAI is not merely soliciting or hiring a competitor’s employees,” the lawsuit said. “OpenAI is waging a coordinated, unfair, and unlawful campaign: OpenAI is targeting those individuals with knowledge of xAI’s key technologies and business plans.”
The complaint alleged that, in just a few months, OpenAI poached at least eight xAI employees, including early xAI engineer Jimmy Fraiture and a senior finance executive. Two former employees, the lawsuit said, have admitted to stealing xAI’s trade secrets.
Altman’s OpenAI has denied the allegations, calling the lawsuit the “latest chapter” in Musk’s “ongoing harassment” against the company.
In OpenAI’s motion to dismiss the complaint, the company alleged that Musk and xAI have “lobbed baseless claims of trade secret misappropriation” to “intimidate current and former xAI employees from working at their place of choice.”
“XAI’s federal trade secret misappropriation claim fails as a matter of law,” OpenAI’s attorneys argued in the motion. “Remarkably, xAI never alleges that OpenAI actually acquired or disclosed xAI’s trade secrets.”
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