xAI’s lawsuit against OpenAI alleging the theft of trade secrets has been dismissed by a federal judge. US District Judge Rita F. Lin ruled in favor of OpenAI, dismissing the case with prejudice, meaning xAI cannot refile the lawsuit.
The ruling comes after xAI and Elon Musk failed to substantiate their claims that OpenAI persuaded a former employee to steal confidential information. The lawsuit was initiated in September 2025, shortly after xAI sued the former employee over similar allegations.
In its defense, OpenAI argued there was no link between the company and the alleged misappropriation of trade secrets involving xAI’s former staff. The federal judge had initially dismissed the case in February, allowing xAI to amend its complaint. However, after xAI submitted the amended complaint, OpenAI sought another dismissal, which Judge Lin granted.
According to the judge, xAI “failed to sufficiently allege a connection between OpenAI and the alleged misappropriation.” This dismissal marks another legal setback for Musk concerning OpenAI, as a jury previously ruled that his claims about OpenAI breaching contractual agreements were barred by the statute of limitations.
