A federal judge in San Francisco dismissed xAI’s lawsuit on Monday accusing OpenAI of stealing trade secrets through employee poaching, but gave Elon Musk’s company a chance to refile a revised complaint.
U.S. District Judge Rita F. Lin granted OpenAI’s motion to dismiss “with leave to amend,” finding the current complaint did not plausibly allege that OpenAI induced former xAI employees to take trade secrets or used stolen material after they were hired, according to the case docket published by the U.S. District Court for the Northern District of California.
OpenAI welcomed the ruling in a statement Tuesday from OpenAI Newsroom, calling the case “baseless” and describing it as part of Musk’s broader campaign against the company.
The dispute centers on claims by xAI that OpenAI recruited key staff and obtained confidential information to gain an edge in the AI race. The judge’s order, as reflected on the docket, concluded the allegations were aimed primarily at former employees’ conduct and did not establish a viable misappropriation claim against OpenAI itself.
Elon Musk’s xAI filed the case in September 2025. The judge’s decision does not end the matter outright: the dismissal allows xAI to amend its complaint and attempt to address the deficiencies identified by the court.
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