OpenAI is disrupting almost every industry in its path. But moving fast comes with costs.
In its journey to transform from an AI research lab to one of the most valuable companies in the world, OpenAI — and its CEO, Sam Altman — face significant legal challenges. Everything from OpenAI’s transition to a for-profit business model to how it scrapes the internet has been fodder for lawsuits.
These cases could cost Altman and his company billions of dollars and impact how all of AI trains its chatbots. The risk of multibillion-dollar financial judgments could also complicate any plans OpenAI might have for an IPO.
Some, like the two court battles waged against Altman by partner-turned-rival Elon Musk, have an added appeal: as sheer, popcorn-worthy Clash-of-the-Tech-Titans entertainment.
Here’s the latest on the most significant cases. OpenAI did not respond to Business Insider’s request for comment.
Elon Musk’s $134 billion lawsuit over OpenAI’s for-profit shift
The issue: Elon Musk sued Altman in 2024, accusing his onetime friend and OpenAI cofounder of betraying their original, 2015 nonprofit mission: to develop AI for the public’s benefit, not for private gain. He is seeking between $79 billion and $134 billion from OpenAI and Microsoft.
Musk says he invested $38 million in that early mission only to see OpenAI enter into a multibillion-dollar exclusive licensing deal with Microsoft, creating what his lawsuit calls “a $157 billion, for-profit, market-paralyzing gorgon.” Musk added Microsoft as a defendant to the lawsuit last year.
Altman counters that OpenAI is still controlled by OpenAI’s nonprofit arm. (Altman also says Musk himself tried to restructure OpenAI into a for-profit — under his exclusive control — back in 2017, before severing ties with the company. Musk denies that’s the case.)
What’s at stake: Musk is demanding a return of “wrongful gains” from the OpenAI and Microsoft partnership in an amount to be set by the judge — a number Musk says ranges from $79 billion to $134 billion. Musk says he’ll donate any award to charity.
Musk is also seeking remedies that could affect OpenAI’s structure as a for profit/nonprofit hybrid.
What’s next: Following two years of pretrial battles, jury selection is set for April 27 in Oakland, California, before US District Court Judge Yvonne Gonzalez Rogers.
Musk’s lawsuit over “poached” staffers
The issue: In September, Musk sued OpenAI again, this time accusing the company of stealing his trade secrets and luring away staff from his rival startup, xAI.
OpenAI has “engaged in a deeply troubling pattern” of recruiting xAI employees to gain access to insider intel relating to Musk’s flagship chatbot, Grok, the lawsuit says. OpenAI denies any such pattern.
What’s at stake: Musk withdrew an earlier allegation that OpenAI stole his trade secrets after the judge ruled in February that it lacked evidence.
Musk’s amended lawsuit seeks a jury verdict that would force OpenAI to halt its “anti-competitive practices” and return “any ill-gotten confidential information.” Altman could also be ordered to pay cash penalties.
What’s next: Altman’s side must now file a response to Musk’s amended lawsuit. A trial date has not yet been set by US District Judge Rita F. Lin, who sits in San Francisco.
George R. R. Martin’s lawsuit over copyright infringement
The issue: Altman is also warring with a crowd of authors and journalists in a massive copyright infringement case in federal court in Manhattan.
The authors and creators include novelists George R.R. Martin, Jodi Picoult, and John Grisham. Other plaintiffs in the case are the Authors Guild and comedian Sarah Silverman.
A consortium of news organizations, including The New York Times and The Center for Investigative Reporting, has also joined in the case.
The plaintiffs accuse OpenAI and Microsoft of using their content — without their permission and without compensating them — to train ChatGPT. OpenAI counters that scraping such content is a fair use under copyright law.
What’s at stake: The plaintiffs seek unspecified cash damages and a jury verdict that permanently bars OpenAI from scraping their content.
If successful, the case could lead to millions in damages and clearer guardrails for AI’s future use of published content.
What’s next: US District Court Judge Sidney H. Stein, who sits in Manhattan, has yet to set a trial date.
Meanwhile, new copyright infringement cases continue to be filed; on Tuesday, OpenAI was sued by Encyclopedia Britannica and Merriam-Webster, which claim the tech company used their copyrighted content to train its AI models.
Another lawsuit blames ChatGPT for a teenager’s suicide.
The issue: The parents of Adam Raine sued OpenAI, Altman, 10 employees, and 10 investors in state court in California in August 2025, blaming ChatGPT for their 16-year-old son’s death by suicide.
In February 2026, a California judge ordered a dozen cases, including the Raine suit, to be lumped together with Raine’s under the state’s complex cases law. All of the suits claim that ChatGPT and OpenAI are to blame for a variety of injuries, including additional deaths by suicide.
OpenAI has said that Raine’s death is a “tragedy.” In response to the suit, the AI model maker’s lawyers wrote that Raine’s message history “shows that his death, while devastating, was not caused by ChatGPT.” After the lawsuit was filed in 2025, OpenAI said it was working on new safeguards for ChatGPT. The company has also retired the particular ChatGPT model, 4o, which had a reputation for sycophantic behavior, which is the subject of many of the lawsuits.
What’s at stake: In addition to financial restitution, Raine’s parents are asking for significant changes to ChatGPT, including quarterly compliance audits by an independent monitor.
What’s next: The litigation is still in its early stages, with OpenAI yet to file responses. San Francisco Superior Court Judge Stephen Murphy will oversee the combined cases.
A lawsuit will test whether it’s OK for ChatGPT to provide legal advice.
The issue: Another recent lawsuit accuses OpenAI of practicing law without a license.
The case was brought in federal court in Illinois in February by Nippon Insurance Company of America.
The insurer alleges that OpenAI let ChatGPT file dozens of motions on behalf of a woman seeking disability benefits in an already settled case. Nippon says in the suit that it cost $300,000 to fight the onslaught of flings. OpenAI has not yet responded to the lawsuit’s claims.
The stakes: The case poses a novel question about the extent to which AI companies can be held responsible for the real-world consequences of their chatbots.
While the case concerns ChatGPT potentially acting as a lawyer, OpenAI is making investments in other areas that could pose similar issues, including medicine.
What’s next: OpenAI must now respond to Nippon’s claims. The case is before US District Judge John F. Kness in Chicago.
Read the full article here
