US judge dismisses Musk’s xAI trade secret lawsuit against OpenAI

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(Reuters) – A federal judge dismissed a lawsuit on Monday by Elon Musk’s artificial intelligence company xAI that accused rival Sam Altman’s OpenAI of stealing trade secrets for chatbots.

U.S. District Judge Rita Lin in San Francisco said xAI failed to show that OpenAI induced former xAI senior engineer Xuechen Li to divulge confidential information related to its Grok chatbot, or that OpenAI engineers knew Li might have disclosed any.

Lin dismissed the lawsuit with prejudice, saying it would be “futile” to continue. She dismissed an earlier version in February. The lawsuit originally filed in September focused on broader alleged misappropriation of confidential information, including source code, when xAI employees left for jobs at OpenAI.

Monday’s decision is Musk’s second legal loss against OpenAI in four weeks.

On May 18, a federal jury ruled against the world’s richest person in his $150 billion lawsuit accusing OpenAI and Altman of “stealing a charity” by betraying the company’s original mission as a nonprofit to enrich themselves.

The xAI business is part of Musk’s rocket, satellite and AI company SpaceX.

Neither xAI nor its lawyers immediately responded to requests for comment.