OpenAI Expands Roster of Top Law Firms for High-stakes Lawsuits, Deals

AI start-up OpenAI, most recently valued at $852 billion, has expanded its network of external counsel to include more than a dozen of the largest US law firms as it contends with multiple lawsuits and a looming initial public offering (IPO).

The company, its CEO Sam Altman, and their lawyers at Wachtell, Lipton, Rosen & Katz and Morrison Foerster on Monday secured a major victory in defeating a lawsuit by Elon Musk, who alleged that OpenAI had strayed from its original non-profit mission. The win cleared a potential hurdle to an OpenAI IPO that sources have told Reuters could come as soon as September.

Wachtell has represented OpenAI in a string of significant deals since the release of ChatGPT in 2022, including billions of dollars in fundraising from Microsoft, Nvidia and other investors. The Information reported in March that OpenAI had tapped New York-based Wachtell for its IPO, along with Cooley, a firm with Silicon Valley roots.

Spokespersons at Wachtell and Cooley did not immediately respond to requests for comment. OpenAI did not immediately respond to a request for comment on its work with external law firms, including how much the company is spending on legal services.

Wachtell and its partner William Savitt are also defending OpenAI in a lawsuit filed by Musk’s xAI Corp last year, alleging that the ChatGPT maker and Apple monopolise markets for smartphones and generative AI chatbots.

Musk’s xAI separately sued OpenAI last year for allegedly stealing trade secrets to gain an unfair advantage in developing AI technology. OpenAI has engaged lawyers from Munger, Tolles & Olson to defend it in that dispute.

OpenAI has denied xAI’s claims in both cases and has accused Musk of harassing the company through litigation.

Wachtell is not the only major firm representing OpenAI in both deals and litigation. Latham & Watkins has handled several transactions for the company, including securing a new $4 billion revolving credit line in 2024, and is one of several firms defending OpenAI in a series of high-stakes copyright infringement lawsuits filed by authors, comedians and news agencies, which allege the company used their material without permission to train AI systems.

Morrison Foerster and Keker, Van Nest & Peters are also representing OpenAI, which argues that its use of such material is protected under the copyright fair use doctrine.

OpenAI has also turned to Wilson Sonsini Goodrich & Rosati in a case brought by Nippon Life Insurance Company, which alleges that ChatGPT practised law without a US licence by helping a former disability claimant flood a federal court docket with meritless filings. OpenAI this week asked a federal judge in Chicago to dismiss the lawsuit, arguing that ChatGPT is not a lawyer and does not practise law.

For any enquiries or information, contact ask@tlr.ae or call us on +971 52 644 3004. Follow The Law Reporters on WhatsApp Channels.