A US federal judge dismissed a trade secret lawsuit filed by Elon Musk’s AI company xAI against OpenAI, ruling the accusations unproven and barring refiling of the case on June 15, 2026 [1, 2, 3].
The lawsuit alleged that OpenAI induced former xAI engineer Xuechen Li to disclose confidential information related to xAI’s chatbot Grok. The suit was first filed in September 2025, focusing on claims that xAI employees who moved to OpenAI improperly transferred source code and other trade secrets [4, 1, 2, 3].
US District Judge Rita Lin ruled that xAI failed to show OpenAI encouraged Li to leak confidential information. The judge noted that asking job candidates about their prior work is a routine practice and "To hold otherwise would potentially expose employers to liability any time they inquire about a candidate’s past work" [1]. OpenAI denies employing Xuechen Li or acquiring trade secrets from xAI [1, 3].
The case is part of a string of recent legal defeats for Elon Musk involving OpenAI. On May 18, 2026, a federal jury rejected Musk’s separate $150 billion lawsuit accusing OpenAI and CEO Sam Altman of betraying the company’s nonprofit mission by pursuing profits [4, 1, 3].
xAI, which operates under Musk’s SpaceX group, had a previous trade secret lawsuit dismissed without prejudice in February 2026 but refiled an amended complaint that has now been dismissed with prejudice, preventing any further legal action on the same claims [4, 1, 2].
The dismissal marks a clear legal setback for Musk’s efforts to challenge OpenAI over ownership and control of AI technology. The lawsuit’s final rejection concludes this chapter, with no further filings expected based on the judge’s ruling [1, 2, 3].
