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US judge dismisses xAI trade-secrets lawsuit against rival OpenAI for now

By Thomson Reuters Feb 24, 2026 | 2:18 PM

Feb 24 (Reuters) – A federal judge in California on Tuesday dismissed a lawsuit from Elon Musk’s artificial intelligence ​startup xAI that accused rival ‌Sam Altman’s OpenAI of stealing its trade secrets.

U.S. District Judge Rita Lin in San Francisco said that xAI could refile its case, ‌but ​for now has failed ⁠to allege that ⁠OpenAI committed any misconduct.

The lawsuit, filed in September, claimed that former xAI employees took confidential information with them when ​they left for new jobs at OpenAI.

“Notably absent are allegations about ⁠the conduct of OpenAI ⁠itself,” Lin said. “xAI does not ​allege any facts indicating that OpenAI induced ​xAI’s former employees to steal xAI’s ‌trade secrets or that these former xAI employees used any stolen trade secrets once employed by OpenAI.”

Lin had ⁠signaled in a January opinion that she would likely rule for OpenAI.

Spokespeople and attorneys for ⁠the companies ‌did not immediately respond ⁠to requests for comment on ​the ‌decision. 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.

(Reporting by Blake Brittain in Washington; Editing by ​Chizu Nomiyama)