OpenAI urges California, Delaware to probe Musk ahead of April trial

OpenAI has formally asked the attorneys general of California and Delaware to consider investigations into what it describes as "improper and anti-competitive" conduct by Elon Musk and his associates, sending letters days before a trial scheduled to begin in April. The move adds a regulatory front to an already high-profile legal battle.

In the correspondence, OpenAI argues that Musk’s 2024 lawsuit—seeking in excess of $100 billion in damages from the nonprofit foundation—could effectively cripple the organization’s ability to pursue its mission. Company filings have alleged that Musk explored forming a consortium to acquire OpenAI’s assets and even attempted to recruit other industry figures during that effort. Recent reporting has also raised questions about efforts to circulate opposition research concerning OpenAI’s leadership, which the company cites in its request to state regulators.

While the letters are not a securities event per se, the escalation has structural implications for markets: technology investors may re-evaluate legal and governance risks across AI-related companies, and counterparties could adjust commercial arrangements in response to heightened regulatory scrutiny. The litigation’s overlap with other major industry players underscores the potential for broader strategic and reputational spillovers.

The request comes against a backdrop of prior oversight by state authorities: California and Delaware officials previously reviewed OpenAI’s restructuring plans and reached agreements that allowed the recapitalization to proceed under certain conditions. OpenAI now contends that Musk’s actions threaten the stability of those arrangements and the philanthropic foundation that underpins parts of its governance structure. The interplay between state oversight, corporate restructuring and private litigation makes this dispute notable beyond the immediate parties.

Market participants and legal analysts say the letters signal a calculated shift by OpenAI to invite regulatory scrutiny that could bolster its position in court or, at minimum, complicate Musk’s strategy. If either attorney general opens a formal probe, expect requests for documents and witness interviews that could alter litigation timelines and settlement incentives. In the short term, developments from the state offices and forthcoming court filings will be key indicators for investors watching legal risk in the AI sector.