No plausible claim: xAI lawsuit against OpenAI dismissed for now
A lawsuit filed by AI company xAI against OpenAI has been initially dismissed by the court. The allegations were not plausible and would not incriminate OpenAI.
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A US federal court has temporarily dismissed the lawsuit filed by Elon Musk's AI company xAI against competitor OpenAI, which concerns the theft of trade secrets. xAI could not present any facts to support the allegation that OpenAI had incited former xAI employees to steal company secrets, according to the court order. The court is thus temporarily granting OpenAI's motion to dismiss the proceedings, but gives xAI until March 17th to amend the complaint (US District Court Northern California 3:25-CV-08133).
Alleged theft
In September of last year, xAI filed a lawsuit against OpenAI over the alleged theft of trade secrets. According to the lawsuit, former xAI employees who now work at OpenAI are said to have taken trade secrets with them. OpenAI denies the allegations and describes the lawsuit as a harassment campaign by xAI.
The allegations in the indictment were not directed at the company OpenAI, but at individual employees, the judge explains. xAI does not claim that OpenAI had ordered them to steal trade secrets. "While xAI may state misappropriation claims against a couple of its former employees, it does not state a plausible misappropriation claim against OpenAI, which is the sole defendant in this case.," the judge further writes. She therefore dismisses the lawsuit.
In addition to the company behind ChatGPT, xAI has also filed a separate lawsuit against Xuechen Li, a former employee of the company, Reuters reports. He allegedly admitted to stealing the entire source code of xAI, according to the indictment. xAI is therefore seeking an injunction against Li's employment at OpenAI.
Not the first legal dispute
In early 2026, Musk sued OpenAI and its partner Microsoft for up to $134 billion in damages, of which $109.4 billion from OpenAI alone. The companies allegedly made unlawful profits through his previous involvement in the development of ChatGPT and through venture capital contributed by Musk. The companies have contested the lawsuit. The first hearings are expected in April, according to Reuters.
Last year, xAI also filed a lawsuit against Apple and OpenAI, citing antitrust law. The companies allegedly conspired to hinder competition against Grok.
(mho)
