A United States federal judge has dismissed a lawsuit filed by Elon Musk’s artificial intelligence company, xAI, against OpenAI over allegations of trade secret theft.
The case centered on claims that OpenAI improperly obtained confidential information related to xAI’s Grok chatbot through former xAI senior engineer Xuechen Li. However, US District Judge Rita Lin ruled that xAI failed to provide sufficient evidence showing that OpenAI encouraged Li to disclose confidential information or that OpenAI employees were aware of any alleged disclosure.
The judge dismissed the lawsuit with prejudice, meaning the case cannot be refiled. According to the ruling, allowing the lawsuit to continue would be futile because the claims lacked sufficient legal support.
The lawsuit was first filed in September 2025 and initially accused former xAI employees who moved to OpenAI of taking confidential information, including source code and technical knowledge. After an earlier version of the lawsuit was dismissed in February, xAI submitted an amended complaint focused on a presentation Li reportedly gave during OpenAI's recruitment process.
xAI argued that OpenAI sought information about Grok 4, which was released in July 2025, because it believed future versions of ChatGPT would struggle to compete in certain advanced reasoning tasks. The company also claimed OpenAI was interested in reinforcement learning and post-training techniques that Li had worked on while at xAI.
Judge Lin rejected those arguments, stating that it is normal for employers to ask job candidates about their previous work experience. She said there was no evidence that OpenAI instructed Li to reveal confidential information or trade secrets.
OpenAI has consistently denied the allegations, maintaining that Li never worked for the company and that it never obtained any proprietary information from xAI.
The decision marks another legal setback for Elon Musk in his ongoing disputes with OpenAI. Earlier this year, a federal jury ruled against Musk in a separate lawsuit in which he accused OpenAI and its chief executive, Sam Altman, of abandoning the company's original nonprofit mission for personal financial gain.
While the trade secrets lawsuit has now been dismissed, xAI continues to pursue a separate legal case against Li, who has denied any wrongdoing.
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