The California attorney general declined to join Elon Musk's lawsuit against OpenAI, stating in a letter made public Tuesday that the action does not serve the public interest. The decision marks a setback for Musk, who sought to involve the state in his legal challenge to OpenAI's proposed shift from a nonprofit-controlled model to one allowing equity ownership.
OpenAI, co-founded by Musk and Sam Altman in 2015, is seeking to eliminate the nonprofit board's controlling role to raise up to $40 billion in new funding by the end of the year. The organization has said the nonprofit will retain a financial stake, which it believes will continue to support its mission.
Musk sued OpenAI earlier this year, claiming that the planned structural transition contradicts the organization's founding mission of advancing artificial intelligence for public benefit rather than private gain. In February, a group led by Musk made an unsolicited $97 billion offer for control of OpenAI. The attorney general's office stated that Musk had not sufficiently demonstrated how his lawsuit would benefit Californians and raised concerns that Musk might be attempting to repurpose OpenAI's charitable assets.
Musk's attorney responded in a letter Tuesday that the state misunderstood the intent behind Musk's bid. The response claimed Musk does not want to acquire OpenAI unless the nonprofit governance model is changed and noted that philanthropic leaders and former employees have joined his call to halt the transition.
Although the attorney general's office declined to participate in the lawsuit, it still holds regulatory authority over OpenAI's proposed governance change because the organization is based in California. Approval from the state will be required for any modification to OpenAI's nonprofit status.
Musk, who left OpenAI before it rose to prominence, now runs a rival artificial intelligence firm called xAI, launched in 2023. The dispute between Musk and Altman is expected to culminate in a jury trial set for spring 2026. OpenAI and Altman have denied Musk's allegations and argue that the changes are necessary to secure the capital required for future development.
