Court Throws Out xAI's Trade Secret Lawsuit Against OpenAI

A California judge dismissed xAI's lawsuit against OpenAI, which accused OpenAI of trade secret theft. The judge stated that xAI failed to prove OpenAI's misconduct. xAI plans to file an amended complaint and has also sued a former engineer for allegedly taking trade secrets to OpenAI.

In a significant legal decision, a federal judge in California dismissed a lawsuit from xAI, Elon Musk's artificial intelligence startup, against its competitor OpenAI. The lawsuit accused OpenAI of stealing trade secrets, but U.S. District Judge Rita Lin ruled that xAI had not sufficiently alleged any misconduct by OpenAI.

Judge Lin noted the lack of allegations directly against OpenAI, emphasizing that xAI did not provide evidence that OpenAI induced xAI's former employees to misappropriate its trade secrets. The judge has allowed xAI until March 17 to file an amended complaint if new evidence arises, while a separate lawsuit targets a former xAI engineer.

OpenAI welcomed the dismissal, describing the lawsuit as unfounded and part of Musk's broader campaign against the Microsoft-backed company. The legal battle continues, with Musk claiming $134.5 billion in damages for OpenAI's transition to a for-profit entity, an issue that will see jury selection in April.

(With inputs from agencies.)