OpenAI presses states to scrutinise Musk

OpenAI has asked the attorneys general of California and Delaware to investigate Elon Musk, accusing the billionaire and his associates of improper and anti-competitive conduct as a legal fight over the company’s structure moves towards a jury trial in Oakland later this month. The dispute marks a sharp escalation in a feud that has come to symbolise the wider struggle over who controls advanced artificial intelligence and under what public obligations.

The letter, sent to California Attorney General Rob Bonta and Delaware Attorney General Kathy Jennings, argues that Musk’s campaign against OpenAI is no longer just a contractual or governance quarrel between a former co-founder and the company he helped launch in 2015. OpenAI says Musk now runs a direct rival through xAI and is using litigation, public attacks and deal-making efforts to damage a competitor while regulators review OpenAI’s attempts to reshape its corporate structure. Musk left OpenAI in 2018 and has since become one of its fiercest critics.

At the centre of the conflict is OpenAI’s long and politically sensitive restructuring. The company had been pursuing changes intended to make fundraising easier as model development and computing costs surged, but it has also had to answer concerns that any shift away from strict non-profit control could dilute its original mission of building AI for broad public benefit. Reuters reported last year that OpenAI was examining a benefit-corporation model, then reported in May 2025 that the company stepped back from a fuller separation and said its non-profit parent would remain in control while the for-profit arm was reworked. That compromise still left room for regulatory scrutiny in California and Delaware, where the company’s charitable and corporate arrangements carry legal weight.

Musk’s case is built on the claim that OpenAI abandoned the founding understanding on which he backed the organisation with money, recruitment help and public credibility. He sued in 2024, alleging that the company and chief executive Sam Altman steered the venture away from its non-profit roots and towards commercial gain, particularly through its close alignment with Microsoft. OpenAI rejects that account, describing Musk’s claims as baseless and portraying his actions as part of a broader attempt to obstruct a competitor.

The courtroom battle has already produced several notable rulings. Judge Yvonne Gonzalez Rogers in Oakland refused Musk’s request for a preliminary injunction to halt OpenAI’s conversion efforts, saying he had not met the high legal bar needed for such extraordinary relief, but she also ordered that the dispute move on an accelerated timetable because of the public importance and potential commercial harm involved. In January this year, the judge allowed the core case to proceed to trial, and Reuters has reported that the jury trial is expected to begin in late April in Oakland.

Financial stakes have ballooned alongside the governance arguments. In January, Musk sought damages of as much as $134 billion from OpenAI and Microsoft, claiming they enjoyed “wrongful gains” from his early support of the venture. That figure intensified criticism from OpenAI, which says the litigation threatens to burden its non-profit arm with liabilities so large that they could impair its operations and weaken its stated mission to ensure artificial general intelligence benefits humanity.

OpenAI has also tried to strengthen its argument that Musk’s conduct extends beyond ordinary litigation. Reuters reported that court filings accused Musk of mounting a years-long harassment campaign, including public statements, social media attacks, legal claims and what OpenAI characterised as a sham bid for the company’s assets. Another filing said Musk had tried to enlist Meta chief executive Mark Zuckerberg to support a consortium bid for OpenAI, a detail that OpenAI used to cast doubt on the motives behind his intervention. A federal judge later refused Musk’s attempt to dismiss OpenAI’s harassment-related claims.