Elon Musk's xAI lost its bid for a preliminary injunction to block California's Assembly Bill 2013, which requires AI firms to disclose training data details. US District Judge Jesus Bernal ruled that xAI failed to demonstrate the law reveals trade secrets or causes irreparable harm. The company must now comply with the law, effective since January, while the lawsuit proceeds.
On March 6, 2026, Ars Technica reported that US District Judge Jesus Bernal denied xAI's motion for a preliminary injunction against California's Assembly Bill 2013 (AB 2013). The law, which took effect in January 2026, mandates that AI developers with models accessible in the state disclose information about their training datasets, including sources, collection timelines, whether collection is ongoing, inclusion of copyrighted, trademarked, or patented data, licensing or purchase details, personal information, and the extent of synthetic data used.
xAI argued that these disclosures would reveal trade secrets, such as dataset sources, sizes, and cleaning methods, potentially allowing competitors like OpenAI to replicate its strategies. The company claimed enforcement could be 'economically devastating,' reducing 'the value of xAI’s trade secrets to zero' and harming the AI industry overall. xAI also contended the law violates the Fifth Amendment by treating data as a trade secret and the First Amendment by compelling speech and targeting its chatbot Grok, amid scrutiny over Grok's past issues including antisemitic outputs, nonconsensual intimate imagery, and child sexual abuse materials, which prompted a California probe.
Bernal rejected these claims, noting xAI provided only 'frequent abstractions and hypotheticals' without specifying unique datasets or methods warranting protection. He emphasized the government's interest in transparency, stating it 'strains credulity' to suggest consumers cannot evaluate AI models based on training data, such as whether medical or scientific information was included for reliability assessments. 'In the marketplace of AI models, AB 2013 requires AI model developers to provide information about training datasets, thereby giving the public information necessary to determine whether they will use—or rely on information produced by—Plaintiff’s model relative to the other options on the market,' Bernal wrote.
The ruling comes as Musk faces ongoing legal battles with OpenAI, including a recent dismissal of one lawsuit for lack of evidence of stolen trade secrets. xAI did not respond to requests for comment, while a California Department of Justice spokesperson said the department 'celebrates this key win and remains committed to continuing our defense' of the law. The case will continue, with xAI needing stronger evidence to succeed.
