OpenAI has gone on the offensive. In a letter reportedly sent to government officials, the company accused Elon Musk and Meta of orchestrating a coordinated attack designed to hobble its business at a critical inflection point—its planned conversion from a nonprofit to a for-profit corporation. The accusation, first reported by Gizmodo, marks a sharp escalation in what has become the most consequential corporate feud in the artificial intelligence industry.
The letter, attributed to OpenAI’s leadership, doesn’t mince words. It reportedly frames Musk’s legal challenges and Meta’s public lobbying against OpenAI’s restructuring as something more than independent grievances—a deliberate, synchronized effort by two of the company’s fiercest competitors to use regulatory and legal mechanisms to slow it down. OpenAI argues that the timing and nature of these attacks are not coincidental but strategically aligned to inflict maximum damage during its corporate transition.
That’s a bold claim. But it’s not without circumstantial support.
Musk, an early backer and co-founder of OpenAI, has been waging a multi-front war against the company for over a year. His lawsuit, filed in early 2024 and later refiled in federal court, alleges that OpenAI abandoned its founding mission as a nonprofit dedicated to developing AI for the benefit of humanity. Instead, Musk argues, the organization has become a profit-driven enterprise beholden to its largest investor, Microsoft. The suit seeks to block OpenAI’s conversion to a for-profit entity or, at minimum, to extract what Musk considers fair value for the nonprofit’s assets being transferred.
Meta, meanwhile, has pursued a parallel track. Mark Zuckerberg’s company filed formal objections with the California Attorney General’s office opposing OpenAI’s restructuring. Meta’s argument is that allowing OpenAI to convert would set a dangerous precedent—letting organizations use nonprofit status to attract donations, talent, and goodwill, only to flip into a commercial enterprise once they’ve achieved scale. Meta also submitted comments to regulators in other jurisdictions, pressing the same point. The company has framed its opposition as a matter of public interest. Critics counter that Meta, which is building its own large language models under the Llama brand, has obvious competitive reasons to want OpenAI hamstrung.
OpenAI’s letter reportedly connects these dots explicitly. The company contends that Musk and Meta are not acting out of genuine concern for nonprofit governance or AI safety but are instead weaponizing legal and regulatory processes to protect their own market positions. It’s a framing that casts OpenAI as the target of anticompetitive behavior—a striking rhetorical inversion, given that OpenAI itself has faced scrutiny from lawmakers and regulators over its growing dominance in generative AI.
The backdrop to all of this is money. Staggering amounts of it.
OpenAI is in the process of raising a massive funding round that would value the company at north of $300 billion, according to multiple reports. That valuation hinges on the successful completion of its corporate restructuring, which would allow it to offer conventional equity to investors rather than the capped-profit structure it currently operates under. If the conversion is blocked or significantly delayed, the financial consequences could be severe—not just for OpenAI, but for the investors, including Microsoft, SoftBank, and Thrive Capital, who have committed billions based on the expectation that the restructuring will proceed.
Musk knows this. So does Zuckerberg.
The legal and regulatory terrain is genuinely complex. California Attorney General Rob Bonta has been reviewing OpenAI’s proposed restructuring for months, and his office has significant authority over the disposition of nonprofit assets in the state. Any conversion would likely require OpenAI to compensate the nonprofit entity for the fair market value of assets being transferred—a figure that could run into the tens of billions of dollars. Bonta has signaled that his office is taking the review seriously, and outside parties, including Meta, have been invited to submit comments.
A federal judge in California is also weighing Musk’s claims. In a hearing earlier this year, the court declined to issue a preliminary injunction blocking the conversion but allowed the case to proceed. That means the legal threat remains live, even if it hasn’t yet produced the dramatic intervention Musk sought. OpenAI has argued in court filings that Musk’s claims are meritless and motivated by commercial rivalry—the same argument it’s now reportedly making to government officials.
The strategic calculus behind OpenAI’s decision to go public with these accusations is worth examining closely.
By framing the opposition as a coordinated competitive attack, OpenAI is attempting to shift the narrative. Rather than defending its restructuring on the merits—a conversation that inevitably raises uncomfortable questions about nonprofit governance and the concentration of AI power—the company wants regulators and the public to view the opposition through the lens of market competition. If Musk and Meta are acting in their own commercial interests rather than the public interest, their objections carry less moral weight.
It’s a classic Washington playbook. And it suggests OpenAI is increasingly thinking like the political operation it has been building. The company has ramped up its lobbying presence in D.C. significantly over the past year, hiring seasoned government affairs professionals and engaging with lawmakers on both sides of the aisle. CEO Sam Altman has made frequent trips to Capitol Hill and cultivated relationships with key figures in the Trump administration, including through high-profile meetings and public appearances.
Musk, of course, has his own political capital—arguably more of it. His close relationship with President Trump, cemented during the 2024 campaign, has given him extraordinary access to the White House. Musk ran the Department of Government Efficiency (DOGE) initiative for several months, and while he has stepped back from that role, his influence within the administration remains substantial. His AI company, xAI, is a direct competitor to OpenAI, and he has used his platform on X (the social media company he owns) to relentlessly criticize Altman and OpenAI’s direction.
The political dimensions make this fight unpredictable. The Trump administration has generally signaled a deregulatory approach to AI, but it has also shown a willingness to intervene in corporate disputes when political allies are involved. If Musk leans on his White House relationships to pressure regulators reviewing OpenAI’s conversion, the implications would be significant—and potentially unprecedented.
Meta’s motivations, while less personal than Musk’s, are no less strategic. Zuckerberg has positioned Meta as the champion of open-source AI development, releasing its Llama models under permissive licenses and arguing that open approaches are better for innovation and safety than the closed, proprietary model OpenAI has adopted. Blocking or complicating OpenAI’s access to capital would directly benefit Meta’s competitive position, giving Llama and Meta’s broader AI efforts more room to gain market share.
There’s also a philosophical dimension to Meta’s opposition that shouldn’t be dismissed entirely. The question of whether a nonprofit can legitimately convert to a for-profit entity after accumulating billions of dollars in value is a real one, with implications far beyond the AI industry. Legal scholars have debated the issue, and several nonprofit governance experts have expressed concern that a successful conversion could create perverse incentives for future organizations to exploit nonprofit status as a launching pad for commercial enterprises.
But philosophy and competitive strategy are not mutually exclusive. They rarely are.
OpenAI’s letter, as described by Gizmodo, reportedly asks government officials to consider the source of the opposition and evaluate whether it reflects genuine public interest concerns or commercial self-interest. The company argues that allowing competitors to use regulatory processes to kneecap a rival would be harmful to innovation and to the United States’ competitive position in AI relative to China—an argument that resonates strongly in the current political environment.
The China card is one OpenAI has played before, and effectively. Altman has repeatedly warned that excessive regulation or legal obstruction of American AI companies would benefit Chinese competitors, particularly those backed by the Chinese government. It’s an argument that cuts across partisan lines and has found receptive audiences in both the Biden and Trump administrations.
Whether it’s enough to overcome the legal and regulatory challenges remains to be seen. The California Attorney General’s review is ongoing, and Bonta’s office has given no public indication of when a decision might come. The federal lawsuit is proceeding on its own timeline. And the court of public opinion—where Musk commands an enormous megaphone through X’s hundreds of millions of users—is a battlefield where OpenAI has historically been at a disadvantage.
What’s clear is that the fight over OpenAI’s future has moved well beyond the courtroom. It’s now a full-spectrum conflict involving lobbying, media strategy, regulatory maneuvering, and geopolitical framing. The letter to government officials is just the latest salvo.
For the AI industry, the stakes couldn’t be higher. The outcome will determine not just OpenAI’s corporate structure but the rules of engagement for how AI companies form, raise capital, and compete. If OpenAI’s conversion succeeds, it will validate a model in which nonprofit origins are no barrier to becoming one of the world’s most valuable companies. If it fails—or is significantly constrained—it will send a chilling signal to investors and founders considering similar structures.
Musk and Zuckerberg, for all their differences, appear to agree on one thing: they don’t want that validation to happen. OpenAI is now betting that calling out what it sees as their coordination will be enough to tip the scales in its favor. The audience that matters most isn’t the public. It’s the handful of regulators and judges who will decide.
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