xAI’s lawsuit against OpenAI for trade secret theft dismissed
A US federal judge on Monday dismissed with prejudice xAI’s lawsuit against OpenAI, ruling that the company failed to sufficiently allege a connection between OpenAI and a former employee’s alleged misappropriation of trade secrets.
Elon Musk’s xAI has again failed to prove that OpenAI attempted to steal trade secrets through a former employee, as a federal judge issued a final ruling on Monday. US District Judge Rita F. Lin dismissed the case with prejudice, meaning xAI cannot refile it.
The lawsuit was originally filed in September 2025, accusing OpenAI of trying to persuade a former xAI employee to steal trade secrets. This came one month after xAI directly sued the same former employee for similar reasons.
OpenAI argued there was no connection between the company and the alleged misappropriation by the former employee. Judge Lin initially dismissed the case in February, giving xAI the opportunity to file an amended complaint. xAI did so, but OpenAI again moved to dismiss, and the judge agreed. Lin reiterated that xAI “failed to sufficiently allege a connection between OpenAI and the alleged misappropriation of xAI's former employees.”
This is not the first legal clash between Musk and OpenAI. Earlier this year, a jury ruled that the statute of limitations had expired on Musk’s claims that OpenAI breached its contractual agreements to develop AI for the benefit of humanity and maintain its nonprofit status.
