Elon Musk's generative AI business xAI (also known as SpaceXAI) has appealed to the United States Court of Appeals for the Ninth Circuit over a twice-dismissed case against OpenAI.

Last year, xAI sued its rival, claiming the company stole data center trade secrets through targeted hires. The firm, now part of SpaceX, alleged that multiple workers downloaded or otherwise obtained confidential information and brought it to new roles at OpenAI.

The case was initially dismissed in February this year, but with the option for xAI to amend its complaint. In June, that amended complaint was also dismissed, this time without leave to amend.

US District Judge Rita Lin noted that, even if xAI could prove some departing employees accessed trade secrets, the company was unable to prove that OpenAI had knowledge of the information or used it.

The allegations are not sufficient to plausibly infer that it was obvious to OpenAI engineers that the information disclosed was an xAI trade secret,” she said. “That an xAI engineer ‘confirmed’ that the slides disclosed xAI trade secrets does not supply the inference that an OpenAI engineer, based on their industry experience, would know that the slides disclosed xAI trade secrets.”

One of the employees alleged to have shared, or considered sharing, information is Xuechen Li. xAI successfully gained a motion to temporarily block him from working at OpenAI.

The judge, however, dismissed the overall case due to the lack of evidence that OpenAI was complicit in any trade secret scheme. “Notably absent are allegations about the conduct of OpenAI itself," she said. "xAI does not allege any facts indicating that OpenAI induced xAI’s former employees to steal xAI’s trade secrets or that these former xAI employees used any stolen trade secrets once employed by OpenAI.”

Now, with both attempts dismissed, OpenAI is seeking to force xAI to pay for its attorney fees, totaling $1,041,859.90. xAI has until late August to push back against the charges.

Alongside that effort, xAI has sought to again appeal the case's dismissal. The company filed an appeal this July with the Ninth Circuit under the Defend Trade Secrets Act of 2016.

Mediation questionnaires are due today, with xAI's appeal opening brief set for August 24. OpenAI can answer the appeal by 23 September.

A previous lawsuit by Musk and xAI sought to unwind its for-profit shift. The case was dismissed because it was past the statute of limitations. OpenAI is countersuing over "unlawful harassment."

OpenAI is separately embroiled in a lawsuit with Apple, in which it has been accused of trade secret theft related to consumer AI hardware. Last year, xAI sued both OpenAI and Apple, accusing them of colluding to block rival AI businesses.