OpenAI has escalated its legal conflict with Elon Musk by formally requesting that California and Delaware attorneys general investigate what it describes as his "improper and anti-competitive behavior." The move comes as a high-stakes trial between the two sides is set to begin this month, marking a dramatic turning point in one of tech's most contentious rivalries .

The dispute centers on Musk's 2024 lawsuit against OpenAI, its CEO Sam Altman, and others, in which he accused them of abandoning OpenAI's original nonprofit mission as the company restructures into a for-profit entity. Musk, who co-founded OpenAI in 2015 but departed in 2018, has since launched his own competing AI company, xAI, which offers a chatbot called Grok .

What Specific Allegations Is OpenAI Making Against Musk?

In its letter to state authorities, OpenAI detailed what it considers problematic conduct by Musk and his associates. According to court filings from August, OpenAI alleged that Musk attempted to recruit Meta CEO Mark Zuckerberg to join a consortium bid for OpenAI early last year, though Zuckerberg declined to participate .

OpenAI's chief strategy officer Jason Kwon stated in the letter sent to California Attorney General Rob Bonta and Delaware Attorney General Kathy Jennings that the lawsuit itself poses a threat to the organization's mission. Kwon argued that the litigation could undermine OpenAI's efforts to ensure that artificial general intelligence, or AGI (advanced AI systems that match or exceed human intelligence across most domains), benefits all of humanity .

The stakes in this dispute are extraordinarily high. OpenAI is seeking damages exceeding $100 billion from Musk's consortium, a sum the company argues would effectively cripple its nonprofit foundation if awarded . This financial exposure underscores just how serious both sides view the conflict.

How Could This Trial Impact the AI Industry?

The legal battle raises fundamental questions about competition, intellectual property, and corporate governance in the rapidly evolving artificial intelligence sector. A federal judge in Oakland, California, ruled in January that a jury will hear the trial, rejecting Musk's attempts to have the case dismissed before trial .

OpenAI's decision to involve state attorneys general suggests the company believes the conduct extends beyond a simple business dispute. In its letter, OpenAI criticized the regulatory process itself, with Kwon stating that the attorneys general "did not thoroughly investigate OpenAI's plan to recapitalize and merely relied on promises about what OpenAI will do in the future" .

• The Core Dispute: Musk claims OpenAI violated its founding mission by transitioning from a nonprofit to a for-profit structure, while OpenAI contends Musk is engaging in anti-competitive behavior to undermine the company
• Financial Exposure: The lawsuit seeks damages exceeding $100 billion, which OpenAI argues would cripple its nonprofit foundation if awarded against the organization
• Regulatory Involvement: OpenAI has formally requested that California and Delaware attorneys general investigate Musk's alleged conduct, escalating the dispute beyond the courtroom
• Competitive Context: Musk launched xAI with its Grok chatbot as a direct competitor to OpenAI's ChatGPT after leaving the company in 2018

"The lawsuit could undermine the company's efforts to ensure that artificial general intelligence, or AGI, benefits all of humanity," stated Jason Kwon, chief strategy officer at OpenAI.

Jason Kwon, Chief Strategy Officer at OpenAI

The trial's outcome could set important precedents for how courts evaluate competition in the AI industry. If Musk prevails, it might establish that companies can challenge the governance structures of competitors on mission-related grounds. Conversely, if OpenAI succeeds, it could establish stronger protections for AI companies against what they characterize as coordinated competitive attacks .

The involvement of state attorneys general adds another layer of complexity. Their investigation, if undertaken, could examine whether Musk's actions violated state laws regarding unfair competition or corporate misconduct, potentially leading to regulatory action separate from the civil lawsuit. This dual-track approach reflects OpenAI's determination to address what it views as systematic efforts to damage the company.

As the trial begins this month, the tech industry will be watching closely. The case represents not just a clash between two powerful figures, but a test of how the legal system will handle disputes in an industry that is reshaping technology, business, and society itself. The outcome could influence how AI companies structure themselves, compete, and interact with regulators for years to come.