Texas Attorney General Ken Paxton has sued OpenAI and its CEO Sam Altman. He alleges the company sold ChatGPT as safe and reliable while keeping quiet about its risks.
The case was filed on October 23, 2026, in Collin County district court. It names OpenAI Global, LLC and affiliated entities alongside Altman himself.
What Texas is alleging
Paxton’s office is leaning on two state laws. The first is the Texas Deceptive Trade Practices-Consumer Protection Act, or DTPA. The second is the Securing Children Online through Parental Empowerment Act, better known as the SCOPE Act.
The DTPA is Texas’s general-purpose consumer protection statute. The complaint cites violations of DTPA §§ 17.46(a), (b) and (c).
The SCOPE Act is narrower and newer. It targets how digital services handle minors. The suit points to several of its provisions, including §§ 509.051, 509.052, 509.054 and 509.101.
The core claim is a gap between promise and product. According to the complaint, OpenAI presented ChatGPT as trustworthy while failing to warn users about significant dangers.
The list of alleged harms is long, and some of it is grim. The suit raises concerns about inaccurate outputs, the risk of addiction, and the chatbot allegedly encouraging self-harm or violence. It also references alleged harms involving AI-assisted mass shootings.
Children sit at the center of the complaint. The state also flags alleged unauthorized data collection and what it describes as diminished critical thinking skills among users.
What Paxton wants
The money is the smaller part of the ask. Paxton is seeking over $1 million in monetary relief.
Texas is asking for injunctive relief that would limit minors’ access to ChatGPT. It also wants court oversight for new AI models.
The case has also been designated Level 3 for discovery. That is the setting Texas courts use when the discovery process is shaped by a court order rather than default limits.
From nonprofit to trillion-dollar giant
The complaint highlights OpenAI’s shift in business model. The organization began as a nonprofit with a stated mission of benefiting humanity. It has since become a commercial operation primarily driven by profit.
The numbers trace that arc sharply. OpenAI’s valuation stood at approximately $17 billion when ChatGPT launched. Four years later, it sits at over $1.4 trillion.
There is also a local dimension. OpenAI runs Texas facilities tied to its Stargate infrastructure project, including a site in Abilene.
The lawsuit does not arrive in a vacuum. It follows multiple enforcement actions against OpenAI by various state attorneys general in 2026. Florida is among the states that have applied scrutiny to generative AI products.
What this means for OpenAI and the AI industry
The most important thing to watch is not the dollar amount. It is whether Texas wins any form of court oversight over new model releases.
The decision to name Altman personally also matters. Suing the company is routine for state enforcers. Naming the CEO signals that Paxton wants accountability attached to a person, not just a corporate entity.
The case also tests how far existing consumer protection laws can stretch to cover generative AI. The DTPA was not written with chatbots in mind. If Texas succeeds in applying it here, the playbook becomes available to every state with a similar statute, and most states have one.
Disclosure: This article was edited by Diego Almada Lopez. For more information on how we create and review content, see our Editorial Policy.