OpenAI wants Elon Musk’s AI company to pay more than $1 million for pulling it into a costly legal fight. The ChatGPT maker filed a new request on Monday asking a federal judge to make xAI cover its legal costs. The request came just hours after xAI told the court it plans to appeal the dismissal of its trade secret lawsuit against OpenAI.
The dispute started in September 2025. xAI filed legal case against OpenAI, claiming it had stolen trade secrets. xAI said OpenAI hired its employees and pushed them to bring over private information about Grok, xAI’s flagship AI chatbot. xAI alleged OpenAI ran a launched a planned campaign to take key people away from the company.
US District Judge Rita Lin dismissed the case in February 2026. xAI came back with new arguments in March, but Judge Lin rejected those too on June 15. She made the dismissal permanent this time, so xAI cannot bring the same claims back again. She explained xAI’s was treating normal hiring practices as misconduct.
xAI has announced plans to appeal the ruling. On the same day, OpenAI filed a request asking the court to recover its legal costs. OpenAI argued that xAI filed the lawsuit without enough evidence and forced the company to spend significant money defending the case. OpenAI argued the claims had no proper evidence from the beginning and should never have taken the case to court.
The case also got complicated because of missing evidence. OpenAI alleged xAI of using messaging apps that erased chats automatically. A former xAI finance chief presented a sworn statement to support the case. He worked at xAI from April to July 2025. He said erasing messages was the company’s “default way to communicate.”
Employees used apps like Signal, where messages disappeared within a week. An investor close to Musk suggested him to communicate that way when he joined the company. OpenAI said xAI had not produced a single private document that OpenAI could use to defend itself. OpenAI argued that wiping messages put it at an unfair disadvantage in the case.
This is not the first time Musk has lost against OpenAI in court. A jury rejected a set of claims Musk made against the company in May 2026. Musk co-founded OpenAI in 2015 as a nonprofit focused on safe AI research. He left its board in 2018. He then started xAI in 2023 to compete with OpenAI directly, and both companies have been fighting in courts ever since.
Musk also has a ongoing separate lawsuit against OpenAI federal court in California. That case claiming OpenAI of breaking its original promise to stay nonprofit and work for the public instead of chasing private profit.
The court has not yet decided whether to order xAI to pay the $1 million in legal costs. A judge will review the request and apply legal rules about when a losing party must pay for the other side’s fees.
These legal battles will keep growing. As AI companies fight harder for talent, technology, and market share, their disputes are moving from public statements to the courtrooms. The court decision on this fee request will add another chapter to the long running legal battle between Musk and Sam Altman that shows no signs of cooling down.
