Musk sues OpenAI case to go to court today! Wedbush warns: Don't expect a quick resolution, OpenAI's IPO plans may be hindered.

Elon Musk's legal challenge against OpenAI's transformation into a for-profit company is set to officially "kick off" on Monday. Investment bank Wedbush believes that this case may take longer to reach a resolution, as Musk sees this legal battle as personal vendetta and wants to fight against OpenAI CEO Sam Altman and this AI startup company. This lawsuit was filed by Musk and his AI company xAI in 2024, with defendants including OpenAI CEO Altman, co-founder Greg Brockman, and key investor Microsoft Corporation. Musk accuses Altman and OpenAI of betraying their original non-profit mission and instead pursuing commercial interests, becoming a "closed-source subsidiary" of Microsoft Corporation. He also accuses Microsoft Corporation of benefiting from its early donations to OpenAI while "deliberately aiding and abetting" OpenAI. According to the California court's schedule, this lawsuit, which has global implications for the tech industry, will enter the trial phase on April 27, 2026. Jury selection will take place on that day, followed by a trial lasting about four weeks. Just two days before the trial began, Musk withdrew the fraud allegations against Altman and Brockman, stating that this would streamline the case and allow the jury to focus on the core issues. His original complaint in November 2024 included 26 charges, but now only two remain for trial: breach of charitable trust and unjust enrichment. In a revised relief measures document on April 7, Musk outlined five key demands, including requesting the court to remove Altman from the non-profit board of OpenAI and to remove Altman and Brockman from their executive positions at OpenAI's for-profit entity. Additionally, Musk is seeking $150 billion in damages and has stated that if he receives any compensation, he wants to donate it to OpenAI's charity division. Wedbush analysts led by Dan Ives stated, "The main focus of the trial will be whether OpenAI violated its charitable mission when it split its for-profit division and accepted investments from Microsoft Corporation for its AI technology - theoretically, this is exactly what was promised to Musk not to happen." "As Musk's existing lawsuit continues, the battle between Altman and Musk is escalating. As the case goes to court, judges are increasingly concerned about whether there was fraud in the initial operating structure of OpenAI." The analysts added, "We believe that even if OpenAI and Altman suffer significant setbacks, it is more likely to be superficial bruises rather than a real shake-up of the company and its CEO position. However, when it comes down to it, this is Musk - never underestimate his actions in such situations. While the case is likely to ultimately reach a settlement or resolution, we believe that because Musk sees this legal battle as more personal and sincerely wants to fight it out with Altman and OpenAI, the case may take significantly longer to resolve." Meanwhile, this lawsuit is at a crucial juncture for OpenAI as it races towards an IPO. Analysts pointed out that as this legal dispute unfolds in court, its ripple effects will become the focus of attention for the entire AI industry. Analysts stated, "Given that OpenAI plans to undertake a record-sized IPO in the second half of this year, this will cast a shadow over the company and act as a hindrance." If Musk wins the case, not only may OpenAI's structure, financing path, and IPO plans be forced to be rewritten, but also tech giants deeply linked to OpenAI such as Microsoft Corporation, Oracle Corporation, NVIDIA Corporation, Amazon.com, Inc., as well as the entire AI industry chain with a total scale exceeding $840 billion may face chain impacts. Analysts also believe that this lawsuit exacerbates the competitive landscape in the AI large language models (LLM) field, where OpenAI and xAI are in direct confrontation, vying for market share in the AI arms race. OpenAI currently holds a strong market position, posing risks to other tech participants, including Musk. Looking back on the history of the case, the rift between Musk and Altman dates back to 2018 when they had a conflict over control rights, which ultimately led to Musk's exit from the OpenAI board. As an early core supporter, Musk contributed about $38-45 million and was one of OpenAI's important founding donors, which also became a key basis for his claims. In 2019, to meet the computational power and funding needs, OpenAI set up a for-profit subsidiary company called OpenAI LP with a "profit cap" to form a hybrid structure of non-profit and for-profit entities, and introduced investments from Microsoft Corporation totaling $13 billion. As OpenAI accelerated its commercialization, Musk expressed concerns multiple times, leading to the official lawsuit in 2024. In October 2025, OpenAI further restructured, spinning off its for-profit entity into a public benefit corporation (PBC), laying the groundwork for capital operations, including an IPO. On March 31, 2026, OpenAI completed a new round of financing, receiving commitments of $122 billion, with a valuation of $852 billion, and for the first time opening subscriptions to retail investors, setting a record in Silicon Valley financing. The current equity structure shows that the OpenAI Foundation holds 25.8%, with Microsoft Corporation as the largest external shareholder holding 26.8%. Earlier this month, OpenAI posted on social media that Musk's lawsuit was "simply a harassment campaign driven by arrogance, jealousy, and an intent to slow down the development of a competitor." OpenAI's Chief Strategic Officer Jason Kwan even called on the Attorneys General of California and Delaware to investigate Musk's alleged deliberate efforts to undermine OpenAI. OpenAI stated that Musk has repeatedly tried to interfere with the company's operations and that his actions constitute "anti-competitive behavior." Although data from the prediction platform Kalshi shows that the probability of Musk winning the case has decreased since mid-January and is now below 50%, some analysts point out that if Musk wins, the impact may spread along three paths. First, the funding and talent system of OpenAI will be under pressure. Altman and Brockman are key drivers of OpenAI's funding and strategic cooperation. If there is a change in management or a overturn in the company structure, the IPO plan may have to be postponed, and the funding chain and expansion pace may be restricted. The devaluation of employee stock options may lead to talent loss. Capital and talent may shift towards competitors like Anthropic, Alphabet Inc. Class C, and DeepMind. Second, OpenAI's cooperation network with tech giants will undergo restructuring. As OpenAI is one of the most important pillars of the AI ecosystem and market narrative, any disruption in OpenAI's growth or financing will affect market expectations for AI demand, impacting the entire tech industry. As of April 2026, OpenAI had direct cooperation agreements with Microsoft Corporation, Oracle Corporation, AMD, Amazon.com, Inc., Broadcom Inc., and others, totaling over $840 billion. If the prospects of OpenAI's IPO become uncertain, Microsoft Corporation, as one of its most important business partners and investors, may face direct hits. The cooperation arrangements renegotiated in 2025 may need adjustments, and the economic benefits of Microsoft Corporation in OpenAI's for-profit entity may face uncertainty. Additionally, according to Microsoft Corporation's disclosure in January of this year, 45% of its $625 billion backlog orders come from OpenAI. Other tech giants highly integrated into the OpenAI ecosystem, such as Amazon.com, Inc. with an initial investment of $15 billion, NVIDIA Corporation with a $300 billion investment, and SoftBank with a $40 billion bet on OpenAI, would also face significant impacts. Finally, Oracle Corporation may become the biggest "victim" if Musk wins the case. Over half of Oracle Corporation's $530 billion backlog orders come from OpenAI, and Oracle Corporation lacks the cash flow buffer like Microsoft Corporation and Amazon.com, Inc. This means that if OpenAI falters, it will directly impact Oracle Corporation's growth foundation. However, the demand for computational power itself is real and does not rely on a single company. Even if there is a weakening in OpenAI's demand, it will be taken up by clients like Anthropic, Alphabet Inc. Class C, Meta, and the demand will be reallocated instead of disappearing. In this context, NVIDIA Corporation and AMD would be less affected, while Oracle Corporation would be the most vulnerable.