OpenAI faces multi-state attorney general investigation and wrongful death lawsuit while preparing for ipo

At a glance:

• OpenAI received a subpoena from a coalition of state attorneys general on June 12 seeking documentation on advertising, user data, health information, minor and senior users, deep learning models, policies, and model sycophancy
• The company faces a wrongful death lawsuit alleging ChatGPT failed to protect a user who discussed suicidal thoughts, marking the first such case linked to a chatbot
• OpenAI has filed confidential paperwork with the SEC for an initial public offering though timing and pricing remain undecided

Multi-state investigation targets OpenAI practices

A coalition of state attorneys general served OpenAI with a subpoena on Friday, June 12, demanding extensive documentation about the company's operations and impact on users. The Wall Street Journal reported viewing the subpoena sent by New York's attorney general, which requests records covering advertising practices, user engagement and retention metrics, handling of user data and health information, and activities related to minor and senior users. The inquiry also extends to OpenAI's deep learning models, internal policies, and what the attorneys general describe as model "sycophancy" — a term referring to AI systems that excessively agree with users or tailor responses to please them rather than provide accurate information.

OpenAI acknowledged the investigation in a statement to the Journal, saying it takes the concerns raised by state attorneys general seriously and intends to engage constructively with their offices. The company emphasized its commitment to safely bringing AI benefits to people in a responsible way. It remains unclear what specific event or complaint triggered the coordinated multi-state action, though the breadth of the document request suggests a wide-ranging examination of OpenAI's consumer protection practices, data governance, and model behavior across vulnerable populations.

Previous regulatory pressure and Florida criminal probe

The current investigation follows escalating scrutiny of AI companies by state law enforcement officials. Last year, a bipartisan group of 44 state attorneys general sent a joint letter to Meta, Google, Apple, Microsoft, OpenAI, Anthropic, Perplexity AI, and xAI urging them to implement stronger safeguards to protect children from inappropriate and potentially harmful chatbot interactions. That letter signaled a coordinated regulatory approach to generative AI that has now materialized into formal investigative demands.

In April, Florida Attorney General James Uthmeier opened a criminal investigation into OpenAI after reports emerged that the suspect in the 2025 Florida State University mass shooting had reportedly used ChatGPT. The Florida probe represents an even more aggressive posture, framing potential AI misuse in connection with violent crime. Together, these actions indicate that state attorneys general are pursuing both consumer protection and public safety angles in their oversight of frontier AI systems.

Wrongful death lawsuit raises safety questions

Compounding the regulatory pressure, OpenAI was recently named as a defendant in what is believed to be the first wrongful death lawsuit linked to a chatbot. A parent filed suit alleging the company failed to implement adequate safeguards to protect users from self-harm. According to the complaint, the plaintiff's daughter discussed her suicidal thoughts and plans with ChatGPT in the months leading up to her death, yet the system did not alert her family or authorities. The lawsuit contends that OpenAI had a duty to intervene or at minimum notify emergency contacts when a user expresses imminent danger to themselves.

Legal experts say the case could establish precedent for AI liability in mental health contexts, forcing companies to reconsider how their models handle crisis disclosures. Current industry practice varies widely: some systems provide helpline resources when detecting self-harm language, while others offer only generic supportive responses. The outcome may influence whether AI providers face legal obligations akin to mandatory reporter statutes that apply to therapists and educators.

IPO filing amid legal headwinds

Just days before the subpoena news broke, OpenAI filed confidential paperwork with the Securities and Exchange Commission to go public. The company has not disclosed timing, pricing, or valuation targets for the offering. The move signals confidence from leadership and investors despite the mounting legal and regulatory challenges. An IPO would subject OpenAI to quarterly earnings scrutiny, shareholder litigation risk, and heightened disclosure requirements — all while navigating investigations that could result in fines, consent decrees, or mandated product changes.

The juxtaposition is striking: a company preparing for the public markets while simultaneously facing a multi-state consumer protection investigation, a criminal probe in Florida, and a novel wrongful death claim. Analysts note that the SEC filing itself will require OpenAI to disclose material legal proceedings, potentially revealing more details about the scope and potential financial exposure of these matters than the company has acknowledged publicly.

What to watch next

The state attorneys general investigation could set a template for how regulators nationwide approach AI accountability. If the coalition secures detailed internal documents on model training, safety testing, and user harm incidents, other states may follow with parallel actions or legislation. The Florida criminal probe's trajectory will clarify whether prosecutors view AI providers as potentially complicit when their tools are misused for violent planning.

For the broader industry, the wrongful death lawsuit represents a potential inflection point. A ruling against OpenAI could compel all major AI labs to implement real-time crisis intervention protocols, fundamentally altering how chatbots handle sensitive disclosures. Meanwhile, the IPO process will force unprecedented transparency into OpenAI's financials, governance, and risk factors — offering the clearest picture yet of whether the company's commercial trajectory can withstand its regulatory headwinds.