US judge dismisses Musk’s xAI privacy lawsuit against OpenAI | Business and Financial Issues

The lawsuit filed in September focused on the invasion of privacy.

A US federal judge has dismissed a lawsuit by Elon Musk’s intelligence firm xAI that accused his partner Sam Altman’s OpenAI of stealing social media business secrets.

US District Judge Rita Lin in San Francisco said on Monday that xAI failed to show that OpenAI coerced former xAI chief engineer Xuechen Li into revealing secrets about its Grok chatbot, or that OpenAI engineers knew Li could reveal anything.

Lin dismissed the lawsuit as prejudicial, saying it would be “absurd” to continue. They discontinued the old version in February. The lawsuit filed last September focused on the destruction of many secrets, including source code, by xAI employees who went to OpenAI.

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

On May 18, the trial court ruled against Muskthe world’s richest man, in his $150bn lawsuit accuses OpenAI and Altman of “stealing charity” by presenting the company’s original work as a non-profit in order to enrich himself.

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

Lawyers for xAI did not immediately respond to a request for comment. OpenAI and its lawyers did not immediately respond to requests for information.

Discuss past jobs

The amended complaint focused on Li’s claims when OpenAI recruited him.

Musk’s company said that OpenAI wanted privacy related to the July 2025 release of Grok 4, knowing that what was coming to ChatGPT “couldn’t compete” for complex concepts, and because OpenAI was “lagging behind” in promoting learning and teaching methods that Li understood.

But the judge said asking job candidates to discuss their past work was routine, and one could not say that OpenAI pressured Li into revealing the secret.

“Resisting otherwise would make employers liable whenever they ask about past employment,” Lin wrote.

OpenAI said Li had never worked for the company and that he had no access to xAI’s confidential information.

In seeking the dismissal, OpenAI’s lawyers wrote: “OpenAI does not need or want anyone’s trade secrets, especially not from xAI, which is failing in the market and bleeding talent.”

Li has been charged separately with xAI and has pleaded not guilty.