A federal judge in California has tossed out the trade secrets lawsuit that Elon Musk’s xAI filed against OpenAI, ruling that the AI startup failed to adequately connect its rival to the alleged theft of confidential information about its Grok chatbot.
US District Judge Rita F. Lin of the Northern District of California granted OpenAI’s motion to dismiss the case on February 24, finding that xAI’s complaint primarily pointed fingers at former employees rather than demonstrating that OpenAI itself did anything wrong. The dismissal was without prejudice, meaning xAI gets another shot: the company has until March 17, 2026, to amend its complaint and refile.
What the court actually said
The court evaluated xAI’s allegations and determined there was no persuasive evidence that OpenAI induced or participated in misappropriating trade secrets from xAI. xAI was essentially suing OpenAI for what xAI’s own former employees allegedly did, without drawing a convincing line between those individual actions and OpenAI’s corporate conduct.
The lawsuit, originally filed in September 2025, accused OpenAI of unlawfully hiring xAI engineers specifically to gain access to confidential information about the Grok chatbot. OpenAI moved to dismiss the case in October 2025, and Judge Lin signaled a tentative ruling in favor of dismissal in late January 2026.
