Judge signals Elon Musk's xAI may lose trade secrets lawsuit against Sam Altman's OpenAI
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Judge signals Musk's xAI may lose lawsuit accusing Altman's OpenAI of stealing trade secrets
A federal judge signaled on Friday she may dismiss a lawsuit by Elon Musk's artificial intelligence startup xAI accusing Sam Altman's rival OpenAI of stealing trade secrets to gain an unfair advantage in developing AI technology. U.S. District Judge Rita Lin in San Francisco said her "tentative view" is to grant OpenAI's motion to dismiss xAI's lawsuit, pending oral arguments on Feb. 3. She also said tentatively that xAI could amend its claims if she dismissed its case. Lawyers for xAI and OpenAI did not immediately respond to requests for comment. Musk's startup sued OpenAI in September, accusing it of hiring xAI employees away to obtain confidential information related to the AI chatbot Grok. OpenAI, known for its ChatGPT chatbot, countered by accusing Musk of conducting a "campaign to harass a competitor with unfounded legal claims" because xAI could not keep up with ChatGPT. In a four-page filing outlining her thoughts, Lin said Musk's startup did not plausibly allege that OpenAI acquired or encouraged the theft of trade secrets, despite allegations that some former xAI employees downloaded source code before leaving. Lin also said it was not plausible to infer from xAI's complaint that OpenAI used xAI's trade secrets, or the former xAI employees used them on the job after joining OpenAI. The judge may also dismiss an unfair competition claim, saying xAI's poaching allegations "all focus on poaching in service of acquiring xAI's trade secrets and do not identify any other reason why the hiring of those employees was anticompetitive." Lin asked xAI and OpenAI to address her tentative reasoning at the hearing. The lawsuit is part of a broader legal battle between Musk and OpenAI, which he co-founded and is also suing over its conversion to a for-profit company. Musk, the world's richest person, is seeking as much as $134.5 billion in damages from OpenAI and Microsoft in that case. Jury selection is scheduled for April 27.
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US judge signals Musk's xAI may lose lawsuit accusing Altman's OpenAI of stealing trade secrets - The Economic Times
A federal judge signaled on Friday she may dismiss a lawsuit by Elon Musk's artificial intelligence startup xAI accusing Sam Altman's rival OpenAI of stealing trade secrets to gain an unfair advantage in developing AI technology. US District Judge Rita Lin in San Francisco said her "tentative view" is to grant OpenAI's motion to dismiss xAI's lawsuit, pending oral arguments on February 3. She also said tentatively that xAI could amend its claims if she dismissed its case. Lawyers for xAI and OpenAI did not immediately respond to requests for comment. Musk's startup sued OpenAI in September, accusing it of hiring xAI employees away to obtain confidential information related to the AI chatbot Grok. OpenAI, known for its ChatGPT chatbot, countered by accusing Musk of conducting a "campaign to harass a competitor with unfounded legal claims" because xAI could not keep up with ChatGPT. In a four-page filing outlining her thoughts, Lin said Musk's startup did not plausibly allege that OpenAI acquired or encouraged the theft of trade secrets, despite allegations that some former xAI employees downloaded source code before leaving. Lin also said it was not plausible to infer from xAI's complaint that OpenAI used xAI's trade secrets, or the former xAI employees used them on the job after joining OpenAI. The judge may also dismiss an unfair competition claim, saying xAI's poaching allegations "all focus on poaching in service of acquiring xAI's trade secrets and do not identify any other reason why the hiring of those employees was anticompetitive." Lin asked xAI and OpenAI to address her tentative reasoning at the hearing. The lawsuit is part of a broader legal battle between Musk and OpenAI, which he co-founded and is also suing over its conversion to a for-profit company. Musk, the world's richest person, is seeking as much as $134.5 billion in damages from OpenAI and Microsoft in that case. Jury selection is scheduled for April 27.
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A federal judge in San Francisco indicated she may dismiss Elon Musk's xAI lawsuit accusing OpenAI of stealing trade secrets related to the AI chatbot Grok. Judge Rita Lin said xAI failed to plausibly allege that OpenAI acquired or used confidential information, despite claims that former employees downloaded source code before leaving. The ruling adds another chapter to the escalating legal conflict between Musk and OpenAI.
Federal Judge Questions xAI's Trade Secrets Claims
U.S. District Judge Rita Lin in San Francisco delivered a significant blow to Elon Musk's legal strategy against his former company, signaling she may dismiss a lawsuit by xAI accusing Sam Altman's OpenAI of stealing trade secrets. In a four-page filing released Friday, the federal judge stated her "tentative view" is to grant OpenAI's motion to dismiss the trade secrets lawsuit, though she indicated xAI could amend its claims if the case is dismissed
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. Oral arguments are scheduled for February 3, where both parties will address Judge Rita Lin's preliminary reasoning2
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Source: ET
The Core Allegations in the xAI vs OpenAI Case
Elon Musk's startup sued OpenAI in September, claiming the rival company engaged in poaching employees to gain an unfair advantage in AI technology development. The lawsuit specifically accused OpenAI of hiring xAI employees away to obtain confidential information related to the AI chatbot Grok
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. According to xAI's complaint, some former employees downloaded source code before departing for OpenAI, which Musk's team argued constituted theft of proprietary technology. However, Judge Lin found these allegations insufficient, stating that xAI did not plausibly allege that OpenAI acquired or encouraged the theft of trade secrets2
.OpenAI's Response and Unfair Competition Claims
OpenAI, known for its ChatGPT chatbot, mounted a vigorous defense by accusing Musk of conducting a "campaign to harass a competitor with unfounded legal claims" because xAI could not keep up with ChatGPT's market position
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. Judge Lin appeared receptive to this argument, noting it was not plausible to infer that OpenAI used xAI's trade secrets or that former xAI employees deployed them after joining OpenAI. The judge also signaled she may dismiss an unfair competition claim, observing that xAI's poaching allegations "all focus on poaching in service of acquiring xAI's trade secrets and do not identify any other reason why the hiring of those employees was anticompetitive"2
.Related Stories
Broader Legal Conflict Between Musk and OpenAI
This case represents just one front in an expanding legal battle between Musk and the company he co-founded. The legal conflict between Musk and OpenAI extends to a separate lawsuit challenging OpenAI's conversion to a for-profit company, where Musk is seeking as much as $134.5 billion in damages from OpenAI and Microsoft
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. Jury selection for that case is scheduled for April 27, setting up a high-stakes courtroom showdown. The world's richest person appears determined to challenge his former partners, though this preliminary ruling suggests courts may view his claims skeptically. As competition intensifies in the AI sector, the outcome of these cases could influence how companies approach employee mobility and the protection of proprietary AI development methods. Industry observers will watch closely to see whether xAI can strengthen its allegations or if this signals a broader setback for Musk's legal strategy against OpenAI.References
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