THE legal battle between Elon Musk and Sam Altman faced a significant setback as a San Francisco judge indicated her inclination to dismiss xAI’s allegations of trade secret theft against OpenAI, citing a lack of plausible evidence that the ChatGPT creator improperly acquired or utilised confidential source code.
Reuter cited today that U.S. District Judge Rita Lin issued a four-page filing outlining her tentative view to grant OpenAI’s motion to dismiss the lawsuit ahead of formal oral arguments scheduled for February 3.
While the judge suggested that xAI might be granted leave to amend its claims should the dismissal be finalised, she noted that the current complaint failed to establish a direct link between the hiring of former Musk employees and the misappropriation of intellectual property.
The litigation, initiated by Musk’s startup in September, alleged that OpenAI had engaged in predatory hiring practices to secure proprietary information related to the artificial intelligence chatbot Grok.
According to the court filing, Lin observed that 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.
The judge further remarked that 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.
This assessment extends to the unfair competition claims brought by xAI, with the judge noting that the 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.
OpenAI has consistently maintained that the legal action is part of a broader campaign to harass a competitor with unfounded legal claims, suggesting that the motive stems from xAI’s inability to keep pace with the market dominance of ChatGPT.
Legal representatives for both tech entities remained unavailable for immediate comment following the judge’s preliminary findings.
This case represents one of several high-stakes legal confrontations between Musk and the company he helped co-found.
The billionaire is currently pursuing separate litigation regarding OpenAI’s transition to a for-profit model, seeking damages that could reach 134.5 billion US Dollars. Jury selection for that broader dispute is expected to commence on April 27. - January 31, 2026
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