xAI's trade secret lawsuit against OpenAI has been dismissed
Engadget
by Mariella MoonFebruary 25, 2026
AI-Generated Deep Dive Summary
OpenAI has successfully convinced a court to dismiss a lawsuit filed by Elon Musk’s xAI, which accused OpenAI of stealing trade secrets. US District Judge Rita F. Lin ruled that xAI’s complaint lacked evidence directly implicating OpenAI itself, instead attributing all misconduct to eight former employees who had joined OpenAI around the same time. The judge noted that while xAI alleged these individuals engaged in actions like stealing source code or retaining work chats after leaving, there was no proof OpenAI instructed or benefited from these actions. The dismissal came with leave to amend, allowing xAI to file an updated complaint by March 17, 2026.
The lawsuit had accused former employees of various misdeeds, including stealing source code before joining OpenAI and failing to return certifications after leaving. However, the court found no evidence that these actions were directed or supported by OpenAI. For instance, xAI claimed two employees stole its source code while still in contact with an OpenAI recruiter, but it did not establish whether the recruiter instructed them to do so. Similarly, other allegations centered on former employees’ retention of work chats or
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Originally published on Engadget on 2/25/2026