On Tuesday, a federal judge in California dismissed a lawsuit from Elon Musk’s AI company xAI (X.AI) that accused competitor OpenAI (OPENAI) of stealing its trade secrets, Reuters reported.
U.S. District Judge Rita Lin in San Francisco said that xAI could refile the case, but for now it has failed to allege that the Sam Altman-led startup committed any misconduct, the report added.
OpenAI and xAI did not immediately respond to a request for comment from Seeking Alpha.
The lawsuit, which was filed in September 2025, claimed that former xAI staff took source code related to the company’s AI chatbot Grok and other confidential information with them when they left for new jobs at OpenAI.
“Notably absent are allegations about the conduct of OpenAI itself,” said Lin. “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,” the report noted.
Last month, Lin signaled that she may dismiss the lawsuit. The judge has given xAI until March 17 to file an amended complaint, according to the report.
xAI has separately sued a former engineer, Xuechen Li, for allegedly taking trade secrets to Microsoft (MSFT)-backed OpenAI.
“We welcome the court’s decision,” said OpenAI, the report noted. “This baseless lawsuit was never anything more than yet another front in Mr. Musk’s ongoing campaign of harassment.”
The lawsuit is part of a larger tussle between Musk and OpenAI, which he co-founded and is also suing over its conversion to a for-profit company. Musk is seeking up to $134.5B in damages from OpenAI and Microsoft in that case. Jury selection is slated for April 27, the report noted.
OpenAI said in a court filing that the trade-secrets case was part of a “campaign to harass a competitor with unfounded legal claims” because Grok could not keep up with OpenAI’s ChatGPT, the report added.