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OpenAI Seeks Dismissal of xAI’s Trade-Secret Lawsuit, Calls It Part of Musk’s “Ongoing Harassment”

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OpenAI has asked a U.S. federal judge to dismiss a lawsuit filed by Elon Musk’s startup xAI, which accuses the company of poaching employees to steal trade secrets. In a filing submitted Thursday, OpenAI described the case as part of Musk’s “ongoing harassment” campaign against the company he once co-founded.

The San Francisco lawsuit, filed by xAI last week, claims OpenAI engaged in a “deeply troubling pattern” of recruiting former xAI staff to gain access to proprietary information about its AI chatbot Grok, which it alleges is more advanced than ChatGPT.

OpenAI denied all allegations, calling them “false and unsubstantiated.” The company argued that employees are free to change jobs and that OpenAI has the right to hire talent from any competitor. “Under Musk’s leadership, talented xAI employees are leaving in droves, and some are coming to OpenAI to help advance OpenAI’s mission,” the filing stated. “Those employees have every right to go where they choose.”

OpenAI’s filing further accused Musk of using litigation as a distraction from xAI’s internal struggles, saying the startup is “hemorrhaging talent” to other firms. “This case is an attempt to intimidate OpenAI and distract from the failures of [Musk’s] own competitive AI effort,” the company argued.

Neither Musk’s representatives nor xAI’s attorneys immediately responded to requests for comment.

The dispute adds to a growing web of legal battles between Musk and OpenAI. Musk has already sued OpenAI and CEO Sam Altman over the company’s shift from a non-profit to a for-profit structure, while OpenAI has countersued Musk for harassment. Separately, xAI has sued Apple, alleging it conspired with OpenAI to suppress rival AI platforms—claims that both companies have denied and sought to have dismissed.

The escalating conflict underscores the intensifying rivalry within Silicon Valley’s AI race, where talent mobility, corporate secrecy, and massive investments have become flashpoints in the battle to dominate next-generation artificial intelligence.

Judge Rejects Elon Musk’s Bid to Move SEC Lawsuit From Washington to Texas

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A U.S. federal judge has denied Elon Musk’s request to move a Securities and Exchange Commission (SEC) lawsuit from Washington, D.C. to Texas, rejecting his claim that the capital’s court location was overly burdensome given his packed schedule.

Judge Sparkle Sooknanan ruled on Thursday that while she acknowledges Musk’s demanding workload, his “considerable means” and frequent travel make Washington an appropriate venue. She also noted that Musk spends at least 40% of his time outside Texas, including significant periods in the capital, where he recently led the Department of Government Efficiency.

The judge emphasized that Texas courts face heavier caseloads, while her court could handle the matter with “reasonable alacrity.” Musk’s argument centered on his claim that he works 80 or more hours per week, often sleeping at his office or factories, and that defending himself in Washington would cause “substantial burdens.”

The SEC lawsuit, filed in January, accuses Musk of failing to timely disclose his acquisition of a 5% stake in Twitter (now X) in early 2022. The 11-day delay, according to the SEC, allowed him to buy over $500 million worth of shares at artificially low prices, saving him an estimated $150 million. The agency seeks a civil fine and the forfeiture of those gains, while Musk is attempting to have the case dismissed.

Musk, whose fortune reportedly surpassed $500 billion this week, resides in Austin, Texas, where his major companies—Tesla, SpaceX, and The Boring Company—are headquartered. He had also proposed moving the case to Manhattan, where former Twitter shareholders have filed a related lawsuit, but that request was likewise denied.

The case, titled SEC v. Musk, will proceed in the U.S. District Court for the District of Columbia under docket number 25-00105, setting the stage for another high-profile courtroom battle involving one of the world’s most controversial billionaires.

Apple, Google, and Meta Must Face Lawsuits Over Casino-Style Gambling Apps

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A U.S. federal judge has ruled that Apple, Google, and Meta Platforms must face lawsuits accusing them of promoting and profiting from illegal casino-style gambling apps, rejecting their efforts to dismiss the claims under Section 230 of the Communications Decency Act.

In a decision issued Tuesday, Judge Edward Davila of the U.S. District Court in San Jose, California, denied the companies’ main argument that the federal law shields them from liability for third-party content, saying the lawsuits focus on their active role in processing payments and collecting commissions, not merely hosting apps.

The lawsuits, filed as proposed class actions, allege that Apple’s App Store, Google Play Store, and Meta’s Facebook enabled and profited from apps simulating “Vegas-style” slot machine gambling that have led to user addiction, depression, and even suicidal behavior. The plaintiffs claim the companies brokered and collected 30% commissions — estimated to exceed $2 billion — from in-app purchases.

While some state-level claims were dismissed, Davila allowed most consumer protection claims to proceed, except those filed in California. He stated that the platforms’ activities went beyond publishing and that providing “neutral tools” did not absolve them from responsibility.

“The crux of plaintiffs’ theory is that defendants improperly processed payments for social casino apps,” Davila wrote. “It is beside the point whether that activity turns defendants into bookies or brokers.”

The companies now have the option to appeal immediately to the 9th U.S. Circuit Court of Appeals, with Davila acknowledging the national importance of Section 230 immunity questions.

The ongoing litigation, which began in 2021, consolidates several related cases:

  • In re Apple Inc. App Store Simulated Casino-Style Games Litigation (No. 21-md-02985)

  • In re Google Play Store Simulated Casino-Style Games Litigation (No. 21-md-03001)

  • In re Facebook Simulated Casino-Style Games Litigation (No. 21-02777)

The plaintiffs are seeking unspecified compensatory and triple damages, along with other remedies.