Judge Dismisses xAI Trade-Secrets Suit Against Rival OpenAI for Now

A federal judge in California on Tuesday dismissed a lawsuit from Elon Musk’s artificial intelligence startup xAI that accused rival Sam Altman’s OpenAI of stealing its trade secrets.

U.S. District Judge Rita Lin in San Francisco said that xAI could refile its case, but for now has failed to allege that OpenAI committed any misconduct.

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The lawsuit, filed in September, claimed that former xAI employees took confidential information with them when they left for new jobs at OpenAI.

“Notably absent are allegations about the conduct of OpenAI itself,” Lin said. “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.”

Lin had signaled in a January opinion that she would likely rule for OpenAI.

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Spokespeople and attorneys for the companies did not immediately respond to requests for comment on the decision. The lawsuit is part of a broader legal battle between Musk and OpenAI, which he co-founded and is also suing over its conversion to a for-profit company.

(Reporting by Brittain in Washington; Editing by Chizu Nomiyama)