A federal judge in California has tossed xAI’s trade-secrets lawsuit against OpenAI, handing Sam Altman’s company a notable procedural win in the sprawling legal feud between the two AI giants.
US District Judge Rita F. Lin dismissed the complaint on February 24, describing xAI’s allegations as “conclusory.”
What xAI alleged, and why it didn’t stick
The lawsuit, filed in September 2025, accused OpenAI of orchestrating the poaching of approximately eight xAI employees during the summer of 2025. Those employees allegedly walked out the door with proprietary source code and confidential information tied to xAI’s Grok chatbot and its data center operations.
Judge Lin, presiding in the Northern District of California, acknowledged that the behavior of the former xAI employees might have been “inappropriate.” The court found no plausible allegations that OpenAI itself acquired, used, or induced the theft of trade secrets.
