Musk has no proof OpenAI stole xAI trade secrets, judge rules, tossing lawsuit

Elon Musk appears to be grasping at straws in a lawsuit accusing OpenAI of poaching eight xAI employees in an allegedly unlawful bid to access xAI trade secrets connected to its data centers and chatbot, Grok. In a Tuesday order granting OpenAI’s motion to dismiss, US District Judge Rita F. Lin said that xAI failed to provide evidence of any misconduct from OpenAI. Instead, xAI seemed fixated on a range of alleged conduct of former employees. But in assessing xAI’s claims, Lin said that xAI failed to show proof that OpenAI induced any of these employees to steal trade secrets “or that these former xAI employees used any stolen trade secrets once employed by OpenAI.” Two employees admitted to stealing confidential information, with both downloading xAI’s source code and one improperly grabbing a supposedly sensitive recording from a Musk “All Hands” meeting. But the rest were either accused of retaining seemingly less consequential data, like retaining work chats on their devices, or didn’t seem to hold any confidential information at all. Lin called out particularly weak arguments that xAI’s complaint acknowledged that one employee who OpenAI poached never received access to confidential information allegedly sought after exiting xAI, and two employees were lumped into the complaint who “simply left xAI for OpenAI,” Lin noted. From the limited evidence, Lin concluded that “while xAI may state misappropriation claims against a couple of its former employees, it does not state a plausible misappropriation claim against OpenAI.” Lin’s order will likely not be the end of the litigation, as she is allowing xAI to amend its complaint to address the current deficiencies.