xAI’s lawsuit against OpenAI, alleging theft of trade secrets, has been dismissed with prejudice by a federal judge, meaning xAI cannot refile the case. According to Reuters, US District Judge Rita F. Lin ruled that xAI failed to demonstrate a sufficient connection between OpenAI and the alleged misappropriation by xAI’s former employees.
The lawsuit was initiated in September 2025, soon after xAI accused OpenAI of attempting to persuade a former employee to steal trade secrets. OpenAI responded by asserting that there was no link between its actions and the alleged misconduct by xAI’s ex-employees.
In February 2026, Judge Lin initially dismissed the case but permitted xAI to file an amended complaint. Following this amendment, OpenAI sought another dismissal. The judge sided with OpenAI again, stating that xAI did not adequately establish a connection to support its claims.
This ruling is part of an ongoing legal rivalry between Musk and OpenAI. Earlier in 2026, a jury ruled that the statute of limitations had expired on Musk’s claims against OpenAI regarding breaches of their contractual agreements.
