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Topline
OpenAI’s much-heralded partnership with Apple has deteriorated and could soon result in OpenAI taking legal action, Bloomberg reported Thursday, the latest in a string of turmoil for the AI giant over the past few weeks—which could culminate in a court ruling forcing it to completely overhaul its business model.
OpenAI CEO Sam Altman arrives to court on April 30 in Oakland, California.
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Timeline
May 14Bloomberg reported OpenAI’s relationship with Apple has “become strained” and OpenAI is considering possible legal action, after Apple allegedly did not do enough to integrate ChatGPT into its software as the partnership between the two companies required.
May 12OpenAI CEO Sam Altman testified in Elon Musk’s ongoing trial against OpenAI, during which Musk’s attorney repeatedly questioned whether Altman was trustworthy in an effort to damage the CEO’s credibility with the jury.
May 12OpenAI was sued in federal court after ChatGPT allegedly gave a man advice that led to him fatally overdosing on drugs, one of more than two dozen wrongful death lawsuits that have been filed in recent months against OpenAI and its competitors.
May 11OpenAI was sued for allegedly playing a role in last year’s mass shooting at Florida State University, with the widow of a man killed in the shooting alleging ChatGPT gave advice to the shooter and the chatbot should have had better “guardrails” in place to prevent such harm.
May 8House Oversight Committee chair Rep. James Comer, R-Ky., sent a letter to Altman about his personal investments and what OpenAI was doing to prevent conflicts of interest, investigating the matter as news reports suggest Altman has pushed OpenAI to invest in companies he has a personal stake in.
State attorneys general also recently sent a letter to Securities and Exchange Commission chair Paul Atkins asking him to investigate Altman’s personal investments ahead of OpenAI’s planned IPO, the Wall Street Journal first reported.
April 28The Journal reported OpenAI missed key revenue and user growth targets as it loses market share in the AI space, raising questions about whether it can pay for more computing power without significant revenue growth.
April 27Jury selection began in Musk’s trial against Altman and OpenAI, in which Musk alleges Altman and other OpenAI co-founders intentionally deceived Musk by getting him to invest in OpenAI as a nonprofit, but then changing OpenAI to instead be a for-profit venture.
April 26OpenAI’s video creation service Sora officially ceased operations after OpenAI announced in March it would close, which also ended a $1 billion deal OpenAI had previously struck with Disney around use of the media giant’s characters on the platform.
The move to shutter Sora, which OpenAI initially debuted with much fanfare in September, came as the Journal reported OpenAI was shifting its strategy to focus more on its core coding and enterprise operations, rather than “side quests” like Sora.
What To Watch For
The next few weeks and months could be fraught with more challenges for OpenAI, which reportedly intends to go public as soon as the last quarter of 2026. Jury deliberations are set to begin next week in Musk’s lawsuit against Altman and OpenAI, though the judge in the case will make the final determination based on the jury’s advice. The litigation carries high stakes for OpenAI, which could be forced to revert back to its previous structure as a nonprofit if the court sides with Musk. A win for Musk could also force Altman and OpenAI president Greg Brockman off the company’s board. It also remains to be seen what will happen in Congress’ investigation of Altman, whose personal investments have become a source of scrutiny because he’s acquired stakes in many companies that do business directly with OpenAI. Comer asked Altman to respond to his questions by May 22, and Altman said in his trial testimony that he would respond to the lawmaker’s inquiry. It’s unclear whether the SEC will investigate Altman’s investments as attorneys general have requested, and if that could lead to any consequences for Altman or OpenAI.
What Has Openai Said?
OpenAI has denied Musk’s allegations in the ongoing trial, instead arguing Musk had actually been in favor of OpenAI pursuing a for-profit model when he was first involved with the company and accusing the Tesla CEO of “sour grapes” and retaliating against OpenAI because it succeeded without him. The company has also denied liability in the wrongful death lawsuits that have been brought against it, with spokesperson Drew Pusateri saying about the overdose lawsuit filed May 12, “ChatGPT is not a substitute for medical or mental health care, and we have continued to strengthen how it responds in sensitive and acute situations with input from mental health experts.” Pusateri also responded to the Florida lawsuit by denying OpenAI did anything wrong, saying in a statement, “ChatGPT provided factual responses to questions with information that could be found broadly across public sources on the internet, and it did not encourage or promote illegal or harmful activity.” Altman has defended his outside investments that were raised in the congressional investigation, saying in his testimony Tuesday that he recuses from all matters that could pose a conflict. OpenAI also pushed back on The Journal’s reporting about it missing revenue targets that could impact its future compute contracts, with Altman and chief financial officer Sarah Friar saying in a statement any suggestion the company is pulling back on new compute resources is “ridiculous.” OpenAI “is firing on all cylinders and the mood internally is incredibly positive,” Altman and Friar said in a statement published by The Journal.
Surprising Fact
Any missed revenue or fluctuations in OpenAI’s business won’t have a direct impact on Altman’s finances, as the OpenAI CEO does not have any direct equity in his company. Altman’s wealth—which Forbes values at more than $3.5 billion—is instead entirely based on his outside investments, underscoring why those investments are now raising concern on Capitol Hill.
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