A US federal judge has dismissed xAI’s trade secret lawsuit against OpenAI, handling SpaceX trillionaire Elon Musk his second loss to OpenAI. Elon Musk’s artificial intelligence company xAI, which merged into SpaceX, failed to show that the ChatGPT maker improperly obtained trade secrets related to its Grok chatbot.
Elon Musk Loses xAI Trade Secret Lawsuit Against OpenAI
U.S. District Judge Rita Lin dismissed Elon Musk’s xAI trade secret lawsuit against OpenAI with prejudice, Reuters reported on June 16. She said xAI failed to show that OpenAI induced former xAI senior engineer Xuechen Li to disclose confidential information related to its Grok chatbot.
Lin said it would be “futile” to continue claiming that asking job candidates to discuss their prior work is routine in the hiring process. “To hold otherwise would potentially expose employers to liability any time they inquire about a candidate’s past work,” Judge Rita Lin wrote.
“xAI insufficiently pled inducement in the prior complaint because it offered no nonconclusory allegations allowing a reasonable inference that OpenAI told or encouraged xAI’s former employees to exfiltrate its confidential information,” the order said.
She dismissed an earlier filing by Elon Musk’s xAI in February. The lawsuit originally filed in September after many xAI employees left for jobs at OpenAI.
The decision marked the second defeat Elon Musk, who co-founded OpenAI before departing in 2018, faced in his ongoing conflict with OpenAI and CEO Sam Altman.
Last month, a federal jury rejected Elon Musk’s $150 billion lawsuit against OpenAI, Sam Altman, and co-founder Greg Brockman. The lawsuit alleged the organization abandoned its nonprofit mission and shifted to a commercial structure while deepening its relationship with Microsoft.
Musk Faces New Case Amid SpaceX’s Spectacular IPO
The lawsuit decision against xAI comes as Elon Musk became the world’s first trillionaire following SpaceX’s record-breaking IPO. The company has become the 6th-largest as its market cap reached $2.519 trillion, according to CompaniesMarketCap data.
Moreover, Elon Musk’s net worth rose by $165 billion today, more than Bill Gates’ entire net worth. Elon is now worth $1.3 trillion.
SpaceX hit $3 trillion market cap today.
This means Elon Musk made more money in the last 24 hours than Warren Buffett made in his entire lifetime.
Insane.
— Anthony Pompliano 🌪 (@APompliano) June 16, 2026
As CoinGape reported earlier, Elon Musk, xAI and SpaceX were sued by a former engineer Devin Kim. The whistleblower claimed he was fired for raising safety concerns about the company’s flagship chatbot, Grok.
SpaceX (SPCX) stock closed 19.60% higher at $192.50 on Monday amid a broader market surge as Trump signed the US-Iran peace deal. The stock further climbed 11.57% to $214.86 in overnight trading.
However, Elon Musk-linked Dogecoin (DOGE) slumped more than 2% to $0.0875 as xAI trade secret lawsuit was dismissed. The intraday low and high were $0.08677 and $0.0907, respectively.