OpenAI has urged a U.S. federal judge to throw out a lawsuit filed by Elon Musk's artificial intelligence (AI) startup xAI, calling it baseless and designed to divert attention from Musk's own company's struggles.

In a filing submitted Thursday in San Francisco federal court, OpenAI described the case as“groundless,” saying xAI's lawsuit was“clearly designed to generate publicity to bully and threaten those employees who exercised their right to leave and work elsewhere in the AI industry.” 

The company said the case was not about trade secrets, but rather“the latest chapter of Elon Musk's ongoing harassment of OpenAI in an effort to distract from the failures of his own competitive AI effort.”

The legal filing comes a week after xAI sued OpenAI in federal court, accusing it of engaging in a“deeply troubling pattern” of hiring away former xAI employees to gain access to confidential information about its chatbot, Grok. The complaint alleged that OpenAI poached engineers, including Xuechen Li and Jimmy Fraiture, along with a senior finance executive, to obtain proprietary data.

OpenAI rejected those claims, arguing that xAI is losing staff for internal reasons, including dissatisfaction with Musk's management style and concerns over the company's culture. The filing said,“xAI is hemorrhaging talent to other competitors, including OpenAI,” and noted that former employees have the right under California law to switch jobs freely.

The company also said it has“no tolerance for any breaches of confidentiality, nor any interest in trade secrets from other companies,” and denied that any former xAI employees had disclosed or transferred confidential information to OpenAI.

The case adds to a growing legal feud between Musk and OpenAI, the company he co-founded in 2015. Musk has separately sued OpenAI and CEO Sam Altman over its shift to a for-profit model, while OpenAI has countersued him for harassment.

On Stocktwits, retail sentiment was mixed, with 'neutral' sentiment and 'high' message volume for OpenAI, and 'bearish' sentiment and 'low' message volume for xAI.

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