Judge dismisses xAI trade-secrets suit; Openai wins motion to dismiss
openai secured a partial victory Tuesday when U. S. District Judge Rita F. Lin granted a motion to dismiss in a trade-secrets case brought by xAI, giving xAI leave to amend its complaint.
Judge: allegations point to former employees, not company conduct
Judge Rita F. Lin wrote that “xAI does not point to any misconduct by OpenAI” and found the complaint focused on eight former xAI employees who left for OpenAI around the same time. The ruling noted specific accusations tied to individuals rather than to OpenAI’s actions, and the judge added that “Notably absent are allegations about the conduct of OpenAI itself. ”
Details of xAI’s claims and the court’s reading
xAI’s filing alleged a range of employee misconduct: two former employees were accused of taking source code during their departures while they were communicating with an OpenAI recruiter; two others were said to have retained work chats on their devices after leaving; one declined to provide certifications about confidential information after departure; another allegedly tried to access xAI information about hiring and datacenter optimization after starting at OpenAI; and two more simply left xAI for OpenAI. The judge wrote there was no allegation that the recruiter instructed any employee to steal code.
Openai called the suit harassment
OpenAI posted on X, “We welcome the Court’s decision. This baseless lawsuit was never anything more than yet another front in Mr. Musk’s ongoing campaign of harassment. ” The post came as the court granted dismissal with leave to amend, a procedural result that allows xAI the option to refile with revised claims if it chooses to do so.
How this fits into broader litigation and what comes next
The case is one thread in a broader set of legal conflicts involving Elon Musk, who is CEO of xAI and a former co‑founder of OpenAI. With leave to amend, xAI can refile a revised complaint; separately, a more central lawsuit over OpenAI’s transition from nonprofit to for-profit is scheduled for a jury trial in April.
The immediate next step in this matter is the window for xAI to submit an amended complaint under the judge’s order; the April jury trial in the related lawsuit remains on the court calendar.
