OpenAI has formally called on the attorneys general of California and Delaware to investigate Elon Musk for allegedly engaging in improper and anti-competitive behavior designed to obstruct the company's planned conversion to a for-profit entity, according to a report by Bloomberg Technology published April 6, 2026.
The move represents a significant escalation in the prolonged conflict between OpenAI and Musk, who co-founded the company in 2015 before departing its board in 2018. Musk has since launched his own AI venture, xAI, and has pursued multiple legal and public avenues to challenge OpenAI's restructuring — including a lawsuit filed in California alleging the company betrayed its founding nonprofit mission.
OpenAI is now asking state law enforcement, not just the courts, to scrutinize whether Musk's opposition crosses the line from legitimate advocacy into illegal interference.
Why OpenAI Is Targeting Two States
The choice of California and Delaware is deliberate and jurisdictionally significant. OpenAI operates out of San Francisco, placing it under the regulatory oversight of California's attorney general, who has broad authority to supervise nonprofit corporations and investigate unfair business practices under state law. Delaware, where OpenAI's for-profit subsidiary is incorporated, gives that state's AG a separate but parallel basis to examine conduct affecting corporate governance.
Neither referral automatically triggers a formal investigation. Attorneys general retain full discretion over whether to open inquiries, and OpenAI's letter is advisory in nature — a public and legal signal rather than a binding enforcement action. However, a decision by either office to investigate would carry substantial legal weight and could expose Musk and his representatives to compulsory document requests and depositions.
The Restructuring at Stake
OpenAI's conversion to a for-profit public benefit corporation has been in progress for months and is central to the company's strategy for raising the capital it says it needs to compete in frontier AI development. The company completed a $40 billion funding round in early 2025 at a $300 billion valuation, but investors have conditioned elements of that deal on the restructuring proceeding as planned.
Musk has argued that the conversion betrays the nonprofit mission under which early donors — including himself — contributed funds and resources. OpenAI disputes this characterization entirely, arguing that its restructuring preserves its public benefit obligations while allowing it to attract institutional capital at the scale the current AI race demands.
OpenAI's referral to the attorneys general accuses Musk of going beyond legal opposition and into conduct that, according to the company, constitutes anti-competitive interference — potentially implicating California's Unfair Competition Law and broader federal antitrust principles. The company has not, according to Bloomberg's reporting, filed a separate antitrust complaint with federal regulators at this stage.
Musk's Position and xAI's Competing Interests
The conflict has an obvious commercial dimension. xAI, Musk's AI company, competes directly with OpenAI across large language model development, enterprise contracts, and the race for top research talent. Critics of Musk's campaign against OpenAI's restructuring have argued that blocking or delaying the conversion serves xAI's competitive interests by constraining OpenAI's access to long-term capital and creating reputational and legal uncertainty.
Musk's legal team has pushed back against this framing, maintaining that his concerns are principled and rooted in the original nonprofit compact. His California lawsuit remains active, and he has also publicly advocated — alongside a consortium of investors — for OpenAI to remain under nonprofit governance or be subject to greater public oversight.
OpenAI, for its part, filed counterclaims against Musk earlier in 2026, accusing him of waging a coordinated campaign to damage the company for competitive gain. The AG referral fits within that broader litigation and communications strategy.
What Happens Next
Both the California and Delaware attorneys general will need to decide independently whether to open formal inquiries. California AG Rob Bonta has previously shown willingness to engage with AI-related governance questions, though a direct investigation into a named individual's conduct in a corporate dispute would be a notable step. Delaware's AG office, which routinely handles complex corporate governance matters given the state's role as the home of most U.S. corporate charters, may assess the referral through a narrower legal lens focused on fiduciary and incorporation law.
If either office opens an investigation, it would likely begin with a document preservation request and could eventually involve subpoenas. Any findings would be civil rather than criminal in nature, potentially resulting in injunctions or consent agreements rather than prosecution.
The Delaware Chancery Court, separately, remains a key venue. Delaware courts have jurisdiction over disputes involving entities incorporated there and are known for sophisticated, precedent-setting rulings on corporate governance — making any parallel state AG action there a complement, rather than a substitute, for litigation.
What This Means
OpenAI is using state regulatory referrals as both a legal instrument and a public pressure tool, signaling that it will contest Musk's opposition on every available front — and that the battle over who controls the future of one of the world's most powerful AI companies is moving deeper into institutional and governmental territory.