REGULATORY · COMPETITIVE · USA
US court dismisses xAI trade-secrets claims against OpenAI over hiring ex-employees
Change
A US district judge granted OpenAI’s motion to dismiss xAI’s trade-secrets lawsuit, ruling xAI alleged no plausible misappropriation by OpenAI beyond hiring former xAI staff, while allowing xAI to amend its complaint.
Why it matters
US District Judge Rita F. Lin dismissed xAI’s claims against OpenAI, finding xAI did not provide evidence that OpenAI induced former xAI employees to steal trade secrets or that OpenAI used any stolen information after hiring them. The order notes two former employees admitted downloading xAI source code (and one took a recording), but the court found the complaint did not connect that conduct to OpenAI. As a result, the court indicated xAI may have misappropriation claims against certain former employees, but not a plausible claim against OpenAI on the current pleadings. The judge granted leave for xAI to amend, keeping open a path to refile a more specific complaint.
Implications
- • Trade-secret claims based on hiring alone face dismissal without inducement/use facts
- • Litigation exposure shifts toward individual ex-employees absent new OpenAI-linked evidence
- • OpenAI avoids discovery/merits litigation on the dismissed complaint (for now)
- • xAI’s ability to proceed depends on amended pleadings meeting plausibility standards
Who is affected
- • OpenAI (defendant in the dismissed trade-secrets suit)
- • xAI (plaintiff; must re-plead to pursue claims against OpenAI)
- • Former xAI employees who moved to OpenAI (potential individual liability focus)
- • AI companies relying on aggressive talent hiring (trade-secret litigation posture)
Source
Topics
Law & Public Safety Court Rulings Intellectual Property Technology & Innovation Artificial Intelligence