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Lin granted OpenAI’s motion to dismiss with leave to amend, finding that xAI’s allegations largely focused on former employees’ behavior rather than misconduct by OpenAI, the sole defendant.xAI filed the lawsuit last September, accusing OpenAI of orchestrating a "coordinated, unfair, and unlawful campaign" to steal proprietary technology through targeted employee poaching.The complaint alleged OpenAI "by hook or by crook" induced eight former xAI engineers to misappropriate the company's source code, training methods, and data center deployment strategies, offering multi-million dollar packages to engineers who then stole files within hours of their communications with OpenAI recruiter Tifa Chen.’"xAI does not allege any facts indicating that OpenAI induced xAI's former employees to steal xAI's trade secrets or that these former xAI employees used any stolen trade secrets once employed by OpenAI," Judge Lin noted.Lin set a deadline of March 17 for xAI to file a revised complaint and barred it from adding new claims or parties without court permission.In the order, the judge wrote that to get past the initial stage and reach discovery, a plaintiff must allege facts that, if true, show the defendant committed the wrongful act.In a tweet, OpenAI said that it "welcomed" the judge's decision, claiming that the lawsuit was "baseless" and "another front in Mr. Musk's ongoing campaign of harassment."Ishita Sharma, managing partner at Fathom Legal, told Decrypt the ruling “is reinforcing the high bar for claiming corporate trade-secret liability when employee movement is involved. Mere ‘poaching’ isn’t enough without concrete links tying the employer to misuse.”She said a revised complaint, if filed, “will need to be much more detailed” and could be forced to narrow in on “specific conduct by OpenAI or narrower allegations about individual ex-employees rather than the company broadly.”In fast-moving AI markets, Sharma added, courts want “very specific, fact-based allegations” and “simply hiring former employees isn’t enough” without evidence of inducement or use.Elon Musk's xAI Sues OpenAI Again, This Time Over Alleged Trade Secret TheftxAI alleged in its suit that early engineer Xuechen Li, one of its first 20 hires, uploaded “the entire xAI source code base” to a personal cloud account last July while communicating with OpenAI recruiter Chen on Signal, met her virtually minutes later, and received a multi-million-dollar offer by July 28, which he accepted by August 1.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P Futures6,914.00 +10.25 (+0.15%)Dow Futures49,302.00 +66.00 (+0.13%)Nasdaq Futures25,076.50 +47.75 (+0.19%)Russell 2000 Futures2,665.70 +10.70 (+0.40%)VIX19.46 -0.09 (-0.46%)Gold5,191.90 +15.60 (+0.30%)Trending tickersAMD Advanced Micro Devices, Inc. 213.84 +17.24 (+8.77%)ZETA Zeta Global Holdings Corp. 16.98 +2.00 (+13.35%)WDAY Workday, Inc. 130.23 +1.02 (+0.79%)ETH-USD Ethereum USD 1,911.79 +85.49 (+4.68%)F Ford Motor Company 14.20 +0.56 (+4.11%)PortfolioSign in to access your portfolioSign inTop gainersKEYS Keysight Technologies, Inc. 301.48 +56.48 (+23.05%)IBRX ImmunityBio, Inc. 11.55 +1.72 (+17.50%)UCTT Ultra Clean Holdings, Inc. 71.96 +10.55 (+17.18%)DRS Leonardo DRS, Inc. 43.82 +5.68 (+14.89%)BEAM Beam Therapeutics Inc. 32.29 +3.96 (+13.98%)Top losersCECO CECO Environmental Corp. 60.00 -17.68 (-22.76%)XMTR Xometry, Inc. 44.44 -12.71 (-22.24%)WHR Whirlpool Corporation 71.67 -11.54 (-13.87%)AWI Armstrong World Industries, Inc. 174.30 -18.53 (-9.61%)PLNT Planet Fitness, Inc. 82.61 -8.14 (-8.97%)Most activeNVDA NVIDIA Corporation 192.85 +1.30 (+0.68%)INTC Intel Corporation 46.12 +2.49 (+5.71%)PLUG Plug Power Inc. 1.9100 +0.0700 (+3.80%)IBRX ImmunityBio, Inc. 11.55 +1.72 (+17.50%)AMD Advanced Micro Devices, Inc. 213.84 +17.24 (+8.77%)Top economic eventsEarnings eventsMy earnings eventsEarnings events