OpenAI vs. Musk escalates

OpenAI’s feud with Elon Musk has moved out of Silicon Valley and into state regulators’ inboxes. On April 6, OpenAI asked the attorneys general of California and Delaware to investigate what it called Musk’s “improper and anti-competitive behavior” as he tries to block the company’s restructuring and, in court filings, push to remove Chief Executive Sam Altman. (Reuters: ) (Los Angeles Times: ) That request changes the shape of the fight. What started as a private lawsuit between a co-founder and the company he helped launch is now being framed by OpenAI as a matter for public officials who oversee charities, corporate control, and competition. (Bloomberg: ) (The Hill: ) The core dispute is about what OpenAI is supposed to be. OpenAI began in 2015 as a nonprofit research lab with a public-interest mission, then in 2019 created a for-profit arm under nonprofit control so it could raise the huge sums needed to build advanced artificial intelligence systems. (OpenAI: ) (Forbes: ) OpenAI says that old structure is no longer enough for the scale of money and infrastructure the industry now demands. In its restructuring plan, the company said the for-profit limited liability company would transition into a public benefit corporation, while the nonprofit would remain in control and hold a large ownership stake. (OpenAI: ) Musk says that shift betrays the original deal. He sued OpenAI, Altman, and others in 2024, arguing that the company abandoned the nonprofit mission he says he backed at the start, and he is now seeking to unwind the conversion and restructuring in court. (Reuters: ) (East Bay Times: ) The legal stakes are unusually large even by technology-industry standards. The Los Angeles Times reported Musk’s claims could expose OpenAI to as much as $134 billion, and pretrial reporting indicates the case is headed to a jury trial in Oakland beginning April 27, 2026. (Los Angeles Times: ) (Local News Matters: ) OpenAI’s new argument is that Musk is not just suing over principle. In the letter described by Reuters, OpenAI strategy chief Jason Kwon told regulators that Musk has repeatedly tried to gain control of OpenAI for his own benefit and has used lawsuits and other pressure tactics to weaken a rival in artificial intelligence. (Reuters: ) (CNBC: ) That claim lands differently because Musk now runs a competing artificial intelligence company. His company xAI was launched in 2023, and he also made an unsolicited $97.4 billion bid for OpenAI in February 2025, a move that OpenAI rejected and has used to argue that Musk’s campaign is as much about control as governance. (Gizmodo: ) (Los Angeles Times: ) Musk has tried to blunt the idea that he is chasing a personal payday. He has said any proceeds from a legal victory would go to charity, but that does not erase the practical effect of a win: it could disrupt OpenAI’s structure, leadership, and financing at a moment when the company is trying to expand as fast as possible. (Outlook Business: ) (East Bay Times: ) That timing matters because OpenAI is simultaneously under pressure to prove it can turn scale into a durable business. Reports in recent weeks have described delayed or canceled projects, including the shutdown of the Sora video-generation app, alongside questions about whether some high-profile product bets were too expensive or too far from revenue. (NBC News: ) (Forbes: ) (Economic Times: ) At the same time, the company and its backers are still raising extraordinary amounts of money. SoftBank recently secured a $40 billion bridge loan tied to its OpenAI investment, and OpenAI has said it needs vast capital to fund computing infrastructure and keep building more powerful systems. (Reuters: ) (Bloomberg: ) (OpenAI: ) That is why this fight is being watched far beyond the two men at its center. OpenAI is one of the clearest tests yet of whether a mission-driven artificial intelligence lab can attract corporate-scale funding without tearing apart the governance promises that helped it win trust in the first place. (OpenAI: ) (Reuters: ) The immediate next date is April 27, 2026, when the trial is expected to begin in Oakland unless the case settles or the schedule changes. Before then, California Attorney General Rob Bonta and Delaware Attorney General Kathy Jennings will have to decide whether OpenAI’s complaint is just another move in a bitter corporate war or the start of a broader regulatory case about who gets to control one of the world’s most important artificial intelligence companies. (Local News Matters: ) (Reuters: )