Setback for Elon Musk as US judge signals xAI’s trade theft allegations against OpenAI may get dismissed
Elon Musk-led xAI’s lawsuit against OpenAI may soon be dismissed after a federal judge said his “tentative opinion” was to grant the ChatGPT maker’s request. xAI had alleged that OpenAI waged a coordinated and unfair campaign against it by targeting its employees and using them to steal trade secrets related to the Grok chatbot.
According to a Reuters report, US District Judge Rita Lin has signaled her intention to grant OpenAI’s request to dismiss the xAI lawsuit pending oral arguments on February 3. The judge also temporarily stated that if the case is dismissed, xAI will have the option to amend its claims.
The lawsuit was filed by xAI in September last year, and OpenAI disputed the allegations, stating that it “engaged in a campaign to harass a competitor with false legal claims” and that xAI’s chatbot was unable to compete with ChatGPT.
Judge Lin noted in his four-page filing that despite allegations that several former xAI employees downloaded Grok source code before leaving the company, xAI did not plausibly allege that OpenAI enabled or encouraged the theft of trade secrets.
Lin stated that it is not reasonable to infer from xAI’s complaint that OpenAI used xAI’s trade secrets or that former xAI employees used them in their work after joining OpenAI.
The startup also reportedly denied the unfair competition claim, stating that the poaching accusations “all focus on poaching for the purpose of obtaining xAI’s trade secrets and do not identify any other reason why the hiring of these employees is anti-competitive.”
What did XAI claim?
“OpenAI is not simply soliciting or hiring employees of a competitor. OpenAI is waging a coordinated, unfair and illegal campaign,” the xAI lawsuit said.
The company also alleged that the maker of ChatGPT “targeted individuals with knowledge of xAI’s underlying technologies and business plans, including xAI’s source code and operational advantages in launching data centers, then unlawfully encouraged these employees to violate their privacy and other obligations to xAI.”
Before filing the lawsuit against OpenAI, xAI had filed a lawsuit against its former engineer, Xuechen Li, for allegedly stealing trade secrets related to Grok AI and taking them to the maker of ChatGPT.
Specifically, Musk sued OpenAI for straying from its original mission of for-profits. The billionaire is demanding approximately $134.5 billion in damages from OpenAI and Microsoft in the same lawsuit.
