By Jonathan Stempel
June 15 (Reuters) – A federal judge dismissed a lawsuit on Monday by Elon Musk’s artificial intelligence company xAI that accused rival Sam Altman’s OpenAI of āstealing trade secrets for chatbots.
U.S. District Judge Rita Lin in San Francisco said xAI āfailed to show that OpenAI induced former xAI senior engineer Xuechen Li to divulge confidential information related to its Grok chatbot, āor that OpenAI engineers knew Li might have disclosed any.
Lin dismissed the lawsuit with prejudice, saying it would be “futile” to continue. She dismissed an earlier version in February. The lawsuit originally filed in September focused on broader alleged misappropriation of confidential information, including source code, when xAI employees left for jobs at āOpenAI.
Monday’s decision is Musk’s second legal ā loss against OpenAI in four weeks.
On May 18, a federal jury ruled against the world’s richest person in his $150 billion lawsuit accusing OpenAI and Altman ā of “stealing a charity” by betraying the company’s original mission as a nonprofit to enrich themselves.
The xAI business is part of Musk’s rocket, satellite and AI company SpaceX.
Neither xAI nor its lawyers immediately responded to ārequests for ācomment.
OpenAI said on Monday: “This baseless lawsuit was never āanything more than yet another front in āMr. Musk’s ongoing campaign of harassment.” It made the same statement after February’s dismissal.
TALKING ABOUT PAST WORK IS ROUTINE
The amended complaint focused on a presentation that Li gave while OpenAI was recruiting him.
Musk’s company said OpenAI wanted secrets related to the July 2025 release of Grok 4, knowing its forthcoming update to ChatGPT “could not compete” on complex reasoning, and because OpenAI was “lagging” in reinforcement learning āand post training techniques that Li understood.
But the judge āsaid asking job candidates to discuss their prior work was āroutine, and one could not infer āthat OpenAI pushed Li to leak anything confidential.
“To hold otherwise would potentially expose āemployers to liability any time they inquire āabout a candidateās past āwork,” Lin wrote.
OpenAI has said Li never worked for the company and that it never acquired xAI secrets.
In seeking dismissal, lawyers for OpenAI wrote: “OpenAI does not need or want āanyoneās trade secrets, especially not from āxAI, which is failing in the marketplace and hemorrhaging talent.”
Li is being sued āseparately by xAI and has denied wrongdoing.
(Reporting by Jonathan Stempel in New York; Editing āby Mark Porter, Sanjeev Miglani and Cynthia Osterman)
