A US federal judge has indicated that Elon Musk’s artificial intelligence startup, xAI, may not succeed in its lawsuit accusing rival OpenAI of stealing trade secrets to gain an unfair advantage in AI development.
In a hearing held on Friday, US District Judge Rita Lin in San Francisco said her “tentative view” is to grant OpenAI’s request to dismiss the lawsuit filed by xAI. She noted that her decision remains subject to oral arguments scheduled for February 3, and also stated tentatively that xAI could be allowed to amend its claims if the case is dismissed. Representatives for both xAI and OpenAI did not immediately respond to requests for comment.
xAI filed the lawsuit in September, alleging that OpenAI hired away its employees in order to gain access to confidential information connected to Grok, xAI’s artificial intelligence chatbot. OpenAI, which develops the ChatGPT chatbot, responded by accusing Musk of running a “campaign to harass a competitor with unfounded legal claims,” arguing that xAI had been unable to keep pace with ChatGPT’s development.
In a four-page filing outlining her preliminary assessment, Judge Lin stated that Musk’s startup failed to plausibly demonstrate that OpenAI either acquired trade secrets improperly or encouraged their theft. This was despite claims that some former xAI employees downloaded source code prior to leaving the company. Lin further said it was not reasonable to infer from the complaint that OpenAI used xAI’s trade secrets, or that former xAI employees relied on such information while working at OpenAI.
The judge also signaled she may dismiss xAI’s unfair competition claim, noting that the allegations regarding employee poaching “all focus on poaching in service of acquiring xAI’s trade secrets and do not identify any other reason why the hiring of those employees was anticompetitive.” Lin asked both parties to address her tentative conclusions during the upcoming hearing.
This case forms part of a broader legal dispute between Musk and OpenAI, which he co-founded and is separately suing over its transition to a for-profit company. In that lawsuit, Musk, the world’s richest person, is seeking damages of up to $134.5 billion from OpenAI and Microsoft. Jury selection in that matter is scheduled for April 27.
Separately, US authorities announced a conviction in an unrelated artificial intelligence trade secrets case. The US Department of Justice said a former Google software engineer had been found guilty of stealing AI-related trade secrets for the benefit of China.
A federal jury on Thursday convicted Linwei Ding, 38, on seven counts of economic espionage and seven counts of theft of trade secrets following an 11-day trial in the US District Court for the Northern District of California. According to a statement from Roman Rozhavsky, assistant director of the FBI’s counterintelligence and espionage division, the verdict represents the Justice Department’s first conviction involving AI-related economic espionage charges.
