Elon Musk loses again to OpenAI as court throws out xAI trade secrets case
Follow UsElon Musk has lost another legal fight against Sam Altman-led OpenAI.
This marks Musk's second defeat against OpenAI in less than a month.
The lawsuit accused OpenAI of stealing trade secrets related to its Grok chatbot.
Elon Musk has lost another legal fight against Sam Altman-led OpenAI. A federal judge has dismissed a lawsuit filed by Musk’s AI company xAI, which accused OpenAI of stealing trade secrets related to its Grok chatbot. This marks Musk’s second defeat against OpenAI in less than a month. Read on for the details about both cases.
SurveyUS District Judge Rita Lin ruled on Monday that xAI failed to provide enough evidence to support its claims, reports Reuters. The company has alleged that former xAI senior engineer Xuechen Li shared confidential information with OpenAI while being recruited by the company.
Musk’s company alleged that OpenAI wanted information related to Grok 4’s July 2025 launch. The lawsuit also claimed that the ChatGPT maker knew its upcoming update would struggle to match Grok 4’s reasoning capabilities.
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However, Judge Lin dismissed the lawsuit with prejudice, saying it would be “futile” to continue, according to the report. In her ruling, Lin said asking job candidates about their previous work is a normal part of the hiring process. She wrote, “To hold otherwise would potentially expose employers to liability any time they inquire about a candidate’s past work.”
OpenAI welcomed the decision. The company said, “This baseless lawsuit was never anything more than yet another front in Mr. Musk’s ongoing campaign of harassment.” OpenAI had made the same statement after the earlier dismissal in February.
Meanwhile, lawyers for OpenAI said, “OpenAI does not need or want anyone’s trade secrets, especially not from xAI, which is failing in the marketplace and hemorrhaging talent.”
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This marks Musk’s second courtroom defeat against OpenAI in just four weeks. On May 18, a federal jury ruled against him in a massive $150 billion lawsuit. In that case, Musk accused OpenAI and its CEO Sam Altman of abandoning the company’s original nonprofit mission for personal gain.
Elon Musk’s xAI is still pursuing a separate lawsuit against Li. He has denied any wrongdoing.
Also read: OpenAI sued after ChatGPT allegedly urged woman toward suicide, complaint claims
