OpenAI wins legal battle over xAI trade secrets

On Tuesday, OpenAI secured a legal win in a case against xAI, focusing on claims of employee poaching and trade secret theft.

The judge approved OpenAI's motion to dismiss the case, allowing xAI to potentially refile if they adjust their accusations. 

US District Judge Rita F. Lin noted, “xAI has not presented any direct misconduct by OpenAI.” 

The focus instead was on eight xAI employees who moved to OpenAI, with no accusations that OpenAI directed their departure.

xAI claims that two former staff members “took proprietary code while still communicating with an OpenAI recruiter,” Lin continues, yet “there's no evidence that this was prompted by the recruiter.” 

Additional claims involve employees retaining chat records, resisting requests to certify on confidential data, unsuccessfully seeking xAI’s internal details post-departure, and joining OpenAI without misconduct tied to OpenAI itself. 

Lin emphasises, “OpenAI's direct actions remain unsupported by allegations,” she states.

This legal saga contributes to the broader conflict with Elon Musk, heading xAI and previously co-founding OpenAI. Musk and Altman have been adversaries, exchanging sharp remarks publicly and in digital arenas. 

Their most significant confrontation—a lawsuit concerning OpenAI’s shift from a nonprofit framework to a for-profit model—is slated for jury trial in April.

OpenAI responded with a post on X (formerly Twitter), saying, “The Court's ruling is welcome. The unfounded lawsuit was merely another tactic in Musk’s relentless harassment campaign.”