xAI's lawsuit accusing OpenAI of stealing trade secrets has been thrown out

The federal judge’s final decision is to dismiss the case with prejudice.

Elon Musk and xAI have again failed to prove that OpenAI was trying to persuade one of its former employees to steal trade secrets, according to a federal judge's ruling on Monday. As first reported by Reuters , US District Judge Rita F. Lin ruled in favor of OpenAI by dismissing the lawsuit with prejudice, resulting in a final judgement on the case that doesn't allow xAI to refile the lawsuit.

The lawsuit began in September 2025 when xAI first accused OpenAI of stealing trade secrets, which came a month after Musk's company directly sued one of its former employees for the same reason. OpenAI countered by arguing that there wasn't a connection between itself and the "alleged misappropriation of xAI's former employees." The federal judge dismissed the case in February, leaving xAI with the option to file an amended complaint. While xAI followed up by amending its original complaint, OpenAI again wanted the case dismissed and the judge agreed, reiterating that xAI "failed to sufficiently allege a connection between OpenAI and the alleged misappropriation of xAI's former employees."

It's not the first time that Musk and OpenAI found themselves at the opposite ends of a lawsuit. Earlier this year, a very public legal battle led to a jury ultimately ruling that the statute of limitations had passed for Musk's accusations that OpenAI breached its contractual agreements to develop AI to benefit humanity and its status as a non-profit.