US judge dismisses xAI's trade secrets claims against OpenAI over alleged Grok data leak

A US District Judge Rita Lin dismissed xAI’s lawsuit against OpenAI on Monday, concluding the company failed to prove OpenAI stole trade secrets related to its Grok chatbot. The case hinged on claims that OpenAI induced former xAI senior engineer Xuechen Li to disclose confidential information during recruitment, but Judge Lin ruled that discussing past work in job interviews is routine and no evidence supported xAI’s allegations. The lawsuit, filed in September 2025, accused OpenAI of misappropriating proprietary AI technologies, including details about Grok 4 and reinforcement learning techniques. xAI argued OpenAI was behind in these areas and sought to exploit Li’s expertise, but the judge found no proof OpenAI encouraged Li to reveal confidential data. Li, who never joined OpenAI, remains the subject of a separate xAI lawsuit where he denies wrongdoing. This ruling marks the second legal setback for Elon Musk’s xAI against OpenAI in recent weeks. In May, a jury unanimously dismissed Musk’s claim that OpenAI’s CEO Sam Altman had abandoned the company’s nonprofit mission after Musk’s $38 million donation. The jury ruled Musk’s lawsuit was filed too late, as all claims had expired. OpenAI has consistently denied acquiring any xAI trade secrets, stating Li was never hired. The dismissal was issued with prejudice, preventing xAI from refiling the case. The decision follows Judge Lin’s earlier ruling in February that further amendments to the complaint would be futile. The case highlights ongoing tensions between Musk’s AI ventures and OpenAI, which has shifted from a nonprofit to a commercially focused entity backed by Microsoft. xAI, part of Musk’s broader SpaceX empire, continues to push legal challenges despite repeated setbacks in court.