California Declines to Back Elon Musk’s Lawsuit Against OpenAI

The California attorney general’s office has opted not to support a lawsuit filed by Elon Musk against OpenAI, citing concerns over whether the legal action aligns with the state’s public interest. The decision was revealed in a letter made public on Tuesday, signaling the state’s reluctance to back Musk’s challenge to the AI company he helped create, according to Reuters.

Musk, a co-founder of OpenAI, is embroiled in a high-profile dispute with current CEO Sam Altman regarding the direction of the organization. The lawsuit, filed by Musk earlier this year, opposes OpenAI’s efforts to shift control from its nonprofit board to equity holders. Musk claims this would undermine the nonprofit’s mission and requested the California attorney general to join the suit. However, the attorney general’s office determined that Musk had not demonstrated a compelling public interest in doing so, per Reuters.

In a letter dated Monday, the state attorney general’s office also expressed concern that Musk may be attempting to leverage OpenAI’s charitable resources for personal objectives. The letter references a February offer in which a Musk-led group made an unsolicited $97 billion bid for OpenAI — a move seen by some as an attempt to wrest control of the firm.

Related: Twelve Former Employees Back Musk in Court Fight Over OpenAI’s Structure

In response, Musk’s legal team issued a statement on Tuesday contending that the attorney general misinterpreted Musk’s intentions. According to Reuters, Musk’s lawyers argued that the billionaire has no interest in acquiring OpenAI unless its nonprofit structure is dismantled. They also noted that Musk’s opposition to the transition is backed by several philanthropic organizations and former OpenAI employees, who have also raised alarms about the firm’s changing governance.

Although the California attorney general has chosen not to join the lawsuit, the office retains an oversight role in the matter. As the regulator of nonprofit organizations within the state, it must still approve any structural changes to OpenAI’s nonprofit status, given the company’s California base.

OpenAI, for its part, has maintained that the proposed governance shift is necessary to attract major investments. The company has reportedly said it must finalize the transition by the end of the year to secure a $40 billion funding round. According to Reuters, OpenAI believes that while the nonprofit would relinquish direct control, it would continue to benefit from its growing equity in the for-profit arm — ensuring resources remain available to support its original mission.

Musk, who also leads Tesla and other ventures, departed OpenAI years before it gained global prominence. He filed the lawsuit in 2024, accusing the organization of abandoning its foundational goals of using artificial intelligence for the public good, rather than private gain.

Source: Reuters