Elon Musk's xAI faced a setback in court as a U.S. District Judge dismissed its lawsuit against OpenAI, which accused OpenAI of unlawfully poaching eight xAI employees and attempting to access xAI’s trade secrets related to its data centers and chatbot, Grok.
Judge Rita F. Lin granted OpenAI’s motion to dismiss, citing xAI’s failure to provide sufficient evidence of wrongdoing by OpenAI. According to Lin, xAI focused too heavily on alleging misconduct by its former employees rather than proving OpenAI's involvement in any illicit activities.
Despite two former employees admitting to stealing confidential information, including source code and a sensitive recording from a meeting hosted by Musk, the allegations against the others were deemed less significant. Most of these involved retaining non-critical data or failing to possess any confidential information. Lin highlighted particularly weak arguments in the complaint, noting that one poached employee had reportedly never accessed the alleged confidential information and two others simply transitioned to OpenAI.
Based on the evidence provided, Lin concluded that “while xAI may state misappropriation claims against a couple of its former employees, it does not state a plausible misappropriation claim against OpenAI.”
Despite the current dismissal, this may not mark the end of the legal battle. Lin has allowed xAI the opportunity to amend its complaint to address the identified shortcomings.