OpenAI has escalated its legal conflict with Elon Musk, formally urging the attorneys general of California and Delaware to open investigations into the billionaire's conduct. In a letter sent Monday, the artificial intelligence company accused Musk of engaging in "improper and anti-competitive behavior" designed to sabotage its corporate restructuring, which was negotiated with the state officials last year.
The request comes as Musk's lawsuit against OpenAI, its CEO Sam Altman, and co-founder Greg Brockman is scheduled for trial this month. Musk alleges the founders breached the company's original non-profit mission after he helped launch and fund the venture. He later founded his own AI company, xAI, in 2023.
Allegations of Undermining Governance
In the letter, OpenAI Chief Strategy Officer Jason Kwon wrote that Musk's "ongoing and persistent efforts" are aimed at undermining agreements reached during a 2024 recapitalization. "We bring this to your attention because these attacks on OpenAI are premised on the unique structure, mission and history that were implemented through your October Agreements," Kwon stated.
The core dispute centers on OpenAI's complex governance. Founded as a non-profit in 2015, it added a for-profit arm in 2019. Last October, it converted that for-profit entity into a public benefit corporation that remains under the non-profit's control. This followed a reversal of an initial plan to shift to a fully for-profit model, a decision OpenAI said was made after discussions with the attorneys general's offices.
High-Stakes Legal and Financial Maneuvers
Musk's legal offensive includes a demand for $100 billion in damages from OpenAI's non-profit. Kwon argued the lawsuit seeks to "cripple the nonprofit" while "enriching [Musk] with funds that are intended to serve the public." He further warned that Musk intends to use the trial to attack the company's private discussions with state regulators about its restructuring.
The conflict intensified in early 2025 when Musk launched a $97.4 billion bid to acquire OpenAI's non-profit, promising to withdraw the offer if the company halted its conversion plans. OpenAI rejected the bid. This move by Musk reflects the immense financial and strategic stakes in the race for artificial general intelligence (AGI), a topic on which OpenAI has previously outlined broad governance frameworks.
Kwon framed the battle in existential terms, alleging Musk's actions are "designed to take control of the future of AGI out of the hands of those who are legally obligated to pursue the mission of ensuring that AGI benefits all of humanity, and put it into the hands of competitors who lack mission-driven principles and spurn any responsibility for safety." This stance aligns with the company's history of advocating for sweeping policy measures to manage AI's economic impact.
Path to Trial
While U.S. District Judge Yvonne Gonzalez Rogers rejected Musk's attempt to block OpenAI's restructuring, she allowed the core lawsuit to proceed. Jury selection is set to begin on April 27, setting the stage for a landmark trial that could reshape the AI industry's competitive and regulatory landscape.
The outcome may influence how other tech giants navigate the intersection of innovation, corporate structure, and stated public missions. The dispute also unfolds amid broader political tensions, including shifting dynamics in Washington that could affect future tech regulation. OpenAI's call for state intervention signals a strategic pivot to regulatory channels as it prepares for a contentious courtroom battle with one of the world's most prominent and litigious technology figures.
