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A U.S. federal judge has indicated she may dismiss a lawsuit filed by Elon Musk’s artificial intelligence startup xAI, which accuses Sam Altman’s OpenAI of stealing trade secrets to gain an edge in AI development.
U.S. District Judge Rita Lin in San Francisco said her “tentative view” is to grant OpenAI’s motion to dismiss the case, according to a court filing released on Friday. She added that xAI could be given permission to amend its complaint if the case is dismissed. Oral arguments are scheduled for February 3, News.Az reports, citing Reuters.
The lawsuit, filed by xAI in September, alleges that OpenAI hired away xAI employees in order to obtain confidential information linked to Grok, xAI’s AI chatbot. OpenAI has rejected the claims, accusing Musk of running what it described as a campaign to harass a competitor after xAI failed to keep pace with ChatGPT.
In a four-page filing outlining her preliminary assessment, Judge Lin said xAI did not plausibly show that OpenAI acquired or encouraged the theft of trade secrets. While xAI alleged that some departing employees downloaded source code before leaving, the judge said the complaint did not convincingly connect those actions to OpenAI.
Lin also said it was not reasonable to infer that OpenAI used any alleged trade secrets, or that former xAI employees relied on such information in their work after joining the company. She further signaled that she may dismiss an unfair competition claim, noting that xAI’s allegations focused solely on employee poaching tied to trade secrets, without identifying other anticompetitive conduct.
Neither xAI nor OpenAI immediately responded to requests for comment.
The case is part of a wider legal clash between Musk and OpenAI, which Musk co-founded before leaving the company. He is separately suing OpenAI over its transition to a for-profit structure and is seeking up to $134.5 billion in damages from OpenAI and Microsoft. Jury selection in that case is set to begin on April 27.
Judge Lin asked both sides to address her tentative reasoning during next week’s hearing, leaving open the possibility that xAI could revise its claims if the lawsuit is formally dismissed.
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