Dismiss the dis: OpenAI asks court to reject Musk’s xAI trade secret lawsuit

OpenAI has asked a federal judge to dismiss a trade-secret lawsuit filed by Elon Musk’s xAI, calling the case part of Musk’s “ongoing harassment” of the company. The legal filing represents the latest escalation in a broader battle between Musk and his former company amid Silicon Valley’s intensifying competition for AI talent and market dominance.

What you should know: OpenAI denied xAI’s allegations and argued that employees have the right to choose where they work.

• “Under Musk’s leadership, talented xAI employees are leaving in droves, and some are coming to OpenAI to help advance OpenAI’s mission,” OpenAI stated in its filing.
• The company claimed that xAI is “hemorrhaging talent to other competitors, including OpenAI” and called the lawsuit an attempt to “distract from the failures of [Musk’s] own competitive AI effort.”

The allegations: xAI’s lawsuit, filed last week in San Francisco federal court, accused OpenAI of engaging in a “deeply troubling pattern” of hiring former xAI employees to steal trade secrets.

• The suit specifically alleged that OpenAI sought access to trade secrets related to xAI’s AI chatbot Grok, which xAI claimed was more advanced than OpenAI’s ChatGPT.
• xAI accused OpenAI of deliberately targeting its employees to gain competitive advantages in the AI market.

The bigger legal battle: This trade-secret dispute is part of an expanding web of litigation between Musk and OpenAI, the company he co-founded with CEO Sam Altman.

• Musk is separately suing OpenAI over its conversion to a for-profit company, while OpenAI has countersued Musk for harassment.
• xAI has also sued Apple for allegedly conspiring with OpenAI to suppress rival platforms, though both Apple and OpenAI denied those allegations and requested dismissal on Tuesday.

Why this matters: The legal battles highlight the fierce competition for talent and intellectual property in the rapidly growing AI industry, where companies are fighting to attract top engineers and protect their technological advantages. The outcome could set important precedents for how AI companies can recruit employees and what constitutes legitimate competition versus trade secret theft in this emerging sector.