{"slug": "openai-wants-its-legal-fees-from-xai-while-apple-comes-for-openai", "title": "OpenAI wants its legal fees from xAI, while Apple comes for OpenAI", "summary": "OpenAI asked a federal judge to order xAI to pay over $1 million in legal fees after a trade secrets lawsuit was dismissed twice, while Apple separately sued OpenAI for allegedly stealing hardware trade secrets. The cases highlight escalating legal battles over employee poaching and confidential information in the AI industry.", "body_md": "On Monday, OpenAI asked a federal judge in California to rule that xAI’s trade secrets lawsuit against it *“should never have been filed,”* and to make Elon Musk’s company cover more than $1m in legal expenses.\n\nThe filing landed hours after xAI gave notice that it intends to appeal. The case has been dismissed twice; It is now being appealed once and billed for.\n\nxAI sued OpenAI in the Northern District of California in 2025, alleging that its rival had poached engineers and encouraged them to bring confidential information with them, with the complaint centring on Xuechen Li, a former xAI engineer.\n\nIn February, Judge Rita Lin [granted OpenAI’s motion to dismiss](https://beckreedriden.com/xai-v-openai-motion-to-dismiss-granted-but-the-story-might-not-be-over/) the amended complaint, but gave xAI until mid-March to try again.\n\nxAI tried again, adding allegations that OpenAI had encouraged a newly hired employee to discuss work done at his previous employer.\n\nOn 15 June, Lin dismissed the claims a second time, this time without leave to amend, finding that the complaint rested on speculation and at most described the passive receipt of information, which is not misappropriation under the Defend Trade Secrets Act.\n\nHer characterisation, per [the courthouse record](https://www.courthousenews.com/judge-tosses-xai-claims-that-openai-stole-trade-secrets/), was that xAI had tried to recast ordinary Silicon Valley hiring as a conspiracy. That reading is now the basis of OpenAI’s fee motion.\n\nWhich brings us to last Friday, and the reason all of this is suddenly funny.\n\nOn 10 July, Apple sued OpenAI in the same federal district, accusing it of stealing hardware trade secrets to build consumer devices.\n\nThe complaint alleges theft “at every level, from members of its Technical Staff to its Chief Hardware Officer, and in coordination with business partners.”\n\nThat chief hardware officer is Tang Tan, who spent 24 years at Apple, latterly as vice-president of product design for the iPhone and Apple Watch.\n\nApple claims he directed Apple staff interviewing at OpenAI to bring digital designs and prototypes to what the filing calls “show and tell” sessions.\n\nThe suit also names Chang Liu, an eight-year Apple senior systems electrical engineer, who is alleged to have kept his Apple laptop after leaving for OpenAI and used it to download confidential technical documents.\n\nMore than 400 former Apple employees now work at OpenAI, [according to the filing](https://thenextweb.com/news/apple-sues-openai-trade-secrets-theft-hardware), which describes the evidence so far as “the tip of the iceberg.”\n\nApple is seeking an injunction against evidence destruction, the return of its trade secrets, and damages. OpenAI has said it has “no interest in other companies’ trade secrets” and is “focused on building innovative technology.”\n\nFee awards of this kind are not handed out for losing. The Defend Trade Secrets Act allows a court to make the losing side pay where a misappropriation claim was brought in bad faith, which is a considerably higher bar than being wrong twice in front of the same judge.\n\nOpenAI is asking Judge Lin to make that finding against a company whose founder has spent the past year calling it, in various registers, a fraud.\n\nThe two cases turn on almost identical questions. Whether a company that hires aggressively from a rival is thereby acquiring that rival’s secrets, and what a court needs to see before it calls recruitment misappropriation.\n\nOpenAI has spent a year arguing the narrow answer, and won. It will now argue the other side of the same line.\n\nThe relationship with Apple has been unravelling for a while. The two announced a headline Siri partnership in 2024, then drifted apart as OpenAI moved into hardware, buying Jony Ive’s io Products for $6.4bn. The lawsuit is already [complicating OpenAI’s hardware plans](https://thenextweb.com/news/apple-openai-lawsuit-disrupts-hardware-ipo) well before any ruling.\n\nMusk, meanwhile, has had a poor run in these courtrooms. A jury in Oakland [rejected his separate suit](https://thenextweb.com/news/musk-loses-openai-lawsuit-altman-jury-verdict) against Sam Altman over OpenAI’s conversion to a for-profit structure, finding it had been filed too late.\n\nxAI’s appeal now goes to the Ninth Circuit. OpenAI’s fee motion is before Judge Lin. Apple’s case has not yet been scheduled.\n\n## Get the TNW newsletter\n\nGet the most important tech news in your inbox each week.", "url": "https://wpnews.pro/news/openai-wants-its-legal-fees-from-xai-while-apple-comes-for-openai", "canonical_source": "https://thenextweb.com/news/openai-xai-legal-fees-apple-trade-secrets", "published_at": "2026-07-14 09:21:49+00:00", "updated_at": "2026-07-14 10:28:06.156446+00:00", "lang": "en", "topics": ["artificial-intelligence", "ai-policy", "ai-ethics"], "entities": ["OpenAI", "xAI", "Apple", "Elon Musk", "Rita Lin", "Tang Tan", "Chang Liu", "Xuechen Li"], "alternates": {"html": "https://wpnews.pro/news/openai-wants-its-legal-fees-from-xai-while-apple-comes-for-openai", "markdown": "https://wpnews.pro/news/openai-wants-its-legal-fees-from-xai-while-apple-comes-for-openai.md", "text": "https://wpnews.pro/news/openai-wants-its-legal-fees-from-xai-while-apple-comes-for-openai.txt", "jsonld": "https://wpnews.pro/news/openai-wants-its-legal-fees-from-xai-while-apple-comes-for-openai.jsonld"}}