OpenAI is disrupting nearly every industry in its path. but Moving quickly comes at a cost.
In its transformation from an AI research institute to one of the world’s most valuable companies, OpenAI and its CEO Sam Altman are facing significant legal challenges. Everything from OpenAI’s shift to a commercial business model to the way it scrapes the internet is the subject of lawsuits.
These cases could cost Altman and his company billions of dollars and impact the way all AI trains chatbots. The risks of multibillion-dollar financial decisions could also complicate OpenAI’s plans for an IPO.
Some, like partner-turned-rival Elon Musk’s two legal battles against Altman, have more appeal as pure, popcorn-worthy “Clash of the Tech Titans” entertainment.
Here are the latest updates on the most significant incidents: OpenAI did not respond to Business Insider’s request for comment.
Elon Musk has not one, but two lawsuits that are bothering Sam Altman. Brendan Smialowski/AFP via Getty Images
Elon Musk’s $134 billion Litigation over OpenAI’s transition to commercial use
problem: Elon Musk sued Altman in 2024, accusing his former friend and OpenAI co-founder of betraying his original nonprofit mission in 2015 to develop AI for the public good rather than private profit. He is seeking between $79 billion and $134 billion from OpenAI and Microsoft.
Musk says he invested $38 million in its initial mission only to see OpenAI reach multi-billion dollar scale. exclusive license agreement with Microsoft; His lawsuit creates what he calls a “$157 billion for-profit, market-paralyzing gorgon.” Musk added Microsoft as a defendant in his lawsuit last year.
Altman counters that OpenAI still exists. Managed by OpenAI’s nonprofit division. (Altman also said this) Musk himself tried to reorganize OpenAI into a for-profit company. — was under his exclusive control — back in 2017, before severing ties with the company. Mr. Musk denies such a fact. )
What’s going wrong: Mr. Musk is demanding a judge-determined return of “illegal gains” from OpenAI’s partnership with Microsoft, which Mr. Musk says ranges from $79 billion to $134 billion. Musk has said he will donate everything he wins to charity.
Musk is also seeking remedies that could affect OpenAI’s structure as a for-profit/non-profit hybrid.
What’s next: After two years, battle before trialjury selection is scheduled to take place on April 27 in Oakland, California, before U.S. District Court Judge Yvonne Gonzalez Rogers.
xAI sued OpenAI in September. Didem Mente/Anadolu via Getty Images
Musk’s lawsuit over ‘poached’ staff
problem: In September, Musk sued OpenAI again, this time accusing the company of stealing his trade secrets and poaching staff from rival startup xAI.
The complaint says OpenAI engaged in a “highly troubling pattern” of recruiting xAI employees to access inside information about Musk’s flagship chatbot, Grok. OpenAI rejects such patterns.
What’s going wrong: Musk recanted earlier claims that OpenAI stole his trade secrets after a judge ruled in February that there was insufficient evidence.
Fixed by Musk The lawsuit seeks a jury verdict forcing OpenAI to cease its “anticompetitive conduct” and return “unauthorizedly obtained confidential information.” Altman could also be ordered to pay a cash fine.
What’s next: Mr. Altman’s team must now file a response to Mr. Musk’s amended lawsuit. A trial date has not yet been set by U.S. District Judge Rita F. Lin in San Francisco.
George R.R. Martin of Game of Thrones fame is one of the authors suing OpenAI for copyright infringement. Gerald Matzka/Getty Images
George R.R. Martin sued for copyright infringement
problem: Mr. Altman is also battling a number of authors and journalists in a massive copyright infringement case in federal court in Manhattan.
of author and creator Including novelists George R.R. Martin Jodi Pickult and John Grisham. Other plaintiffs in the lawsuit include the Writers Guild and comedian Sarah Silverman.
A consortium of news organizations, including The New York Times and the Center for Investigative Reporting, are also joining the lawsuit.
The plaintiffs accuse OpenAI and Microsoft of using their content in ChatGPT training without permission or compensation. OpenAI counters that scraping such content is fair use under copyright law.
What’s going wrong: The plaintiffs are seeking unspecified cash damages and a jury verdict permanently barring OpenAI from scraping content.
A successful lawsuit could result in millions of dollars in damages. Clearer guardrails for future use of public content by AI.
What’s next: Judge Sidney H. Stein of the U.S. District Court in Manhattan has not yet set a trial date.
Meanwhile, new copyright infringement lawsuits continue to be filed. On Tuesday, OpenAI was sued by Encyclopedia Britannica and Merriam-Webster, alleging that the company used copyrighted content to train its AI models.
According to the California lawsuit, ChatGPT encouraged a 16-year-old boy to commit suicide. Matthias Bork/Photography in partnership via Getty Images
Another lawsuit blames ChatGPT for a teenager’s suicide.
problem: adam lane parents filed suit in California state court against OpenAI, Altman, 10 employees, and 10 investors in August 2025, blaming ChatGPT for the suicide of his 16-year-old son.
In February 2026, a California judge ordered 12 lawsuits including the Lane lawsuit to be lumped together, based on the state’s complex case law. Both lawsuits allege that ChatGPT and OpenAI are responsible for various injuries, including additional suicide deaths.
OpenAI called Lane’s death a “tragedy.” In response to the lawsuit, lawyers for the AI model maker wrote that Lane’s message history “while shocking, shows that his death was not caused by ChatGPT.” After the lawsuit was filed in 2025, OpenAI said it was working on new safeguards for ChatGPT. The company also discontinued certain ChatGPT models 4o, which had a reputation for sycophantic behavior and were the subject of numerous lawsuits.
What’s going wrong: In addition to monetary compensation, Lane’s parents are seeking significant changes to ChatGPT, including quarterly compliance audits by independent monitors.
What’s next: The lawsuit is still in its early stages, and OpenAI has not yet filed a response. San Francisco Superior Court Judge Stephen Murphy will oversee the consolidated case.
Another lawsuit accuses OpenAI of giving inappropriate legal advice Seksan Mongkolkamsao/Getty Images
Whether it’s OK for ChatGPT to provide legal advice will be tested in a lawsuit.
problem: Another recent lawsuit accuses OpenAI of engaging in unauthorized legal practice.
The lawsuit was filed in February in federal court in Illinois by Nippon Insurance Company of America.
The insurance company alleges that OpenAI caused ChatGPT to file dozens of claims on behalf of women seeking disability benefits in previously settled cases. Japan says in its lawsuit that it cost $300,000 to fight off the onslaught. OpenAI has not yet responded to the lawsuit’s claims.
Bet: The lawsuit raises new questions about the extent to which AI companies can be held responsible for the real-world impact of chatbots.
While this lawsuit concerns ChatGPT’s potential to act as a lawyer, OpenAI has investments in other areas that could pose similar problems, such as healthcare.
What’s next: OpenAI must now respond to Japan’s claims. The lawsuit has been filed with U.S. District Judge John F. Kunes in Chicago.