OpenAI has secured a legal victory against xAI over allegations of employee poaching and the theft of trade secrets.
The dismissal was granted with leave to amend, which means xAI can file the case again if it updates or changes its claims.
According to the ruliing, xAI failed to show wrongdoing by OpenAI itself.
OpenAI has secured a legal victory against xAI in an ongoing dispute related to allegations of employee poaching and the theft of trade secrets. On Tuesday, a US court dismissed xAI’s lawsuit against OpenAI. However, the dismissal was granted with leave to amend, which means xAI can file the case again if it updates or changes its claims. The ruling was issued by US District Judge Rita F. Lin.
In her decision, Lin made it clear that xAI failed to show wrongdoing by OpenAI itself, reports The Verge. She wrote that ‘xAI does not point to any misconduct by OpenAI’ in its current claims. ‘Instead, it points to eight former xAI employees who left for OpenAI at around the same time,’ with no indication that OpenAI directed their actions while leaving xAI.
The lawsuit claimed that two former xAI employees ‘stole its source code during their departure at a time when they were communicating with an OpenAI recruiter,’ Lin writes, but ‘there is no allegation that the recruiter told them to do so.’
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xAI also accused other former staff members of different actions. According to xAI, two employees ‘retained work chats on their devices after leaving xAI.’ Another person ‘refused xAI’s demands to provide various certifications about confidential information after his departure.’ One former employee allegedly ‘unsuccessfully tried to access xAI information about hiring and datacenter optimization after he started working at OpenAI.’ Meanwhile, two others ‘simply left xAI for OpenAI.’
Despite these accusations, the judge said the claims did not prove illegal behaviour by OpenAI. ‘Notably absent are allegations about the conduct of OpenAI itself,’ Lin writes.
Reacting to the latest ruling in a post on X, OpenAI said, ‘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.’
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This case is part of a broader and increasingly tense legal battle between OpenAI CEO Sam Altman and Elon Musk, who leads xAI and is also a former co-founder of OpenAI. Over the past few years, Musk and Altman have clashed publicly through social media posts, statements, and lawsuits. Their biggest ongoing fight concerns OpenAI’s move from a nonprofit structure to a for-profit model. That case is currently set to go to trial in April.
