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OpenAI seeks dismissal of Elon Musk’s xAI lawsuit

Oluwatosin Adeyemi by Oluwatosin Adeyemi
October 5, 2025
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OpenAI Inc. has asked a U.S. federal judge to dismiss a lawsuit by Elon Musk’s AI startup, xAI, alleging trade secret theft and employee poaching.

OpenAI described the allegations as “baseless” in its court filing on Thursday, claiming the lawsuit is intended to garner attention and scare away former xAI workers who departed to take positions in the AI industry.

The development highlights the growing competition for talent and intellectual property and intensifies a well-known legal dispute between two significant players in the generative AI market.

“This case is clearly designed to generate publicity to bully and threaten those employees who exercised their right to leave and work elsewhere in the AI industry and to try to chill further flight from xAI,” the filing said, according to Bloomberg.

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“Unable to match OpenAI’s innovation, xAI has filed this groundless trade secret lawsuit,” OpenAI’s lawyers said. “To be clear, OpenAI does not need or want anyone’s, much less xAI’s, trade secrets to achieve OpenAI’s mission.”

OpenAI emphasised that the company had every right to hire departing employees exercising their legal rights.

Lawsuit filed by Elon Musk’s xAI

The lawsuit was filed last week in federal court in San Francisco by xAI, a company that Elon Musk founded as a rival in the rapidly expanding generative AI market.

According to the startup, OpenAI hired at least eight of its staff members to obtain confidential knowledge about xAI’s Grok chatbot, which xAI asserts is more sophisticated than OpenAI’s ChatGPT.

Xai described OpenAI’s hiring practices as a “deeply troubling pattern” intended to obtain competitive AI secrets.

However, OpenAI rejected the claims as unfounded and untrue.

“Under Musk’s leadership, talented xAI employees are leaving in droves, and some are coming to OpenAI to help advance OpenAI’s mission,” OpenAI said in its filing.

Tags: employee poachinglawsuitOpenAItrade secret theftxAI
Oluwatosin Adeyemi

Oluwatosin Adeyemi

Oluwatosin Adeyemi is a seasoned writer with 5+ years of experience. He holds a degree in Animal Science from Olabisi Onabanjo University. A hardworking and creative individual with a passion for teamwork and self-improvement.

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