Elon Musk’s AI venture just took another legal hit. US District Judge Rita Lin dismissed xAI’s trade secret misappropriation lawsuit against OpenAI with prejudice, meaning xAI can’t come back with amended claims. OpenAI is now looking to recoup more than $1 million in legal costs from the ordeal.
The ruling, handed down on June 15, caps a case that xAI originally filed in September 2025. The core allegation was dramatic: xAI accused OpenAI of orchestrating a “coordinated campaign” of employee poaching and inducing a former xAI employee to leak sensitive proprietary information related to its technologies, particularly around Grok, xAI’s flagship AI model.
Judge Lin wasn’t convinced. She found that xAI failed to establish a direct link between OpenAI’s actions and any alleged theft by the former employee.
Musk’s losing streak against OpenAI
This isn’t even Musk’s first loss against OpenAI in recent months. A jury rejected separate claims Musk had filed against the company back in May 2026. Two swings, two misses.
