Nebraska is asking a state court to fine OpenAI up to $50,000 for every violation of its Age-Appropriate Online Design Code Act, in a complaint Attorney General Mike Hilgers filed in the District Court of Buffalo County on 14 October 2026. By our arithmetic, that is 25 times the $2,000 per violation the same complaint seeks under Nebraska’s two consumer-protection laws.
MLex reported on 3 November that Nebraska’s complaint “stood out because it was the first time a state had attempted to enforce an Age-Appropriate Design Code”, which it describes as laws “passed by a half-dozen states”. The design-code count, Count IX, lists 14 things the state alleges OpenAI has failed to do for minors on ChatGPT, by our count. These are allegations; no court has ruled on them.
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The key insight: As we read it, Nebraska’s complaint turns a design law into a pricing question for AI chat products: Count IX asks $50,000 per violation, 25 times the consumer-law figure by our arithmetic, for 14 failures toward minors the state alleges, by our count.
The complaint, Case Number D09CI260000488, names eight OpenAI entities, among them OpenAI Global, LLC, OpenAI OpCo, LLC and OpenAI Group PBC. It brings nine counts. The first three are under the Nebraska Consumer Protection Act and the Uniform Deceptive Trade Practices Act; the others are negligence, two strict-liability counts, fraudulent and negligent misrepresentation, and Count IX, “Violation of Nebraska’s Age-Appropriate Online Design Code”.
Paragraph 289 alleges that OpenAI has failed to, among other things, “adopt an age verification system to identify when ChatGPT is interacting with a covered minor”, provide minors “with accessible and easy-to-use options to limit the amount of time the covered minor spends on the covered online service”, adopt parental controls that comply with the law, “ensure that covered minors do not receive push alerts during prohibited hours” and “prohibit the use of dark patterns on ChatGPT”.
The complaint also says that “No age verification is required to access the ChatGPT website” and that ChatGPT claims a 13+ rating on Apple’s App Store. It cites OpenAI’s December 2025 teen principles and says they rely on an “age prediction model”, which it describes as “slowly being rolled out on ChatGPT consumer plans”, and that the mode “is not automatically on”.
Civil penalties per violation asked for in Nebraska’s complaint against OpenAI (prayer for relief D and E) and in Iowa’s petition (up to $40,000, as we reported on 14 October), with the case timeline. 25 times = $50,000 / $2,000, our arithmetic. These are amounts asked for, not awarded.
Who the Code Covers
The business lever is the compliance cost for AI chat products: the complaint applies a design law, written in terms of “covered online services”, to a chatbot. It argues ChatGPT is an “online service” and that each defendant qualifies because, among other tests, it has “annual gross revenue in excess of twenty-five million dollars” and processes the personal data of “fifty thousand or more consumers, households, or devices”.
The duties it cites run from tools that let a minor opt out of “unnecessary covered design features” to “default settings” that provide “the highest protection available for the safety of the covered minor”. As we read it, those are product-design requirements, so the remedy Nebraska asks for, an injunction against continuing violations, would reach how ChatGPT is built for Nebraska teens, not only what OpenAI says about it.
The Penalties Asked For
The prayer for relief asks the court to declare that OpenAI violated the design-code act, enjoin further violations, and award civil penalties of $2,000 per violation of the consumer-protection laws and $50,000 per violation of the design-code act. It also asks for disgorgement or restitution, compensatory damages, costs and fees, and demands a jury trial. The complaint does not state a total dollar amount.
Iowa’s petition, announced the same day, asks for up to $40,000 per violation of the Iowa Consumer Fraud Act, as we reported on 14 October. Nebraska’s design-code figure is $10,000 higher per violation, by our arithmetic.
What Hilgers Said
Hilgers said, as quoted by KLKN-TV in Lincoln: “It markets its AI as safe for minors, yet its products have deep flaws that have led to suicide, violence, and harm. This lawsuit simply holds OpenAI to the same standards under Nebraska law as any other company.” He also said “The United States must win the race for artificial intelligence”.
As we read it, the design-code count is about how the product is built, not what OpenAI says about it: the duties the complaint cites include default settings, time limits, parental tools and a ban on dark patterns.
As we read it, the coverage test the complaint applies, more than $25 million in revenue and data from 50,000 or more consumers, is written for online services in general, so the complaint treats a chatbot like any other covered service.
As we read it, the count rests on allegations made upon information and belief, and the complaint does not say how many violations Nebraska will count.
State of Nebraska v. OpenAI, complaint, 14 October 2026
“So ChatGPT’s lack of gatekeeping mechanisms is not simply problematic, but unlawful, and reflects a willful disregard for Nebraska law and child safety”
Three Implications
FOR AI CHAT PRODUCTS The complaint argues that a chatbot with more than $25 million in revenue that processes data from 50,000 or more consumers is a covered online service under Nebraska’s design code.
FOR OPENAI Nebraska asks for an injunction under the design-code act as well as penalties of $50,000 per violation, disgorgement and damages, and demands a jury trial.
FOR OTHER STATES MLex reported that such codes have been passed by a half-dozen states and challenged by NetChoice on First Amendment grounds.
The framework puts it this way: “The governance layer sits at the intersection of capability, regulation, national security, access control, and geopolitical alignment.”
As we read it, Nebraska is asking a court to set conditions inside that layer for minors: age verification, parental tools and protective defaults. The framework is the owner’s argument and does not discuss this lawsuit.
No court has ruled on any of the claims, and the complaint says the design-code violations are alleged “Upon information and belief”. We did not read a response from OpenAI to the Nebraska complaint in the material we read, and we did not contact OpenAI or the attorney general’s office. MLex’s characterisation of the case as the first state enforcement of such a code is its own; we read its summary, not its full article.
The 25 times and $10,000 comparisons are our arithmetic on the penalties each complaint asks for, not amounts any court has set.
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Nebraska’s complaint applies its Age-Appropriate Online Design Code Act to ChatGPT, alleges 14 failures toward minors, by our count, and asks for $50,000 per violation, 25 times its consumer-law figure, by our arithmetic.
A note on sourcing. We read Nebraska’s 108-page complaint as posted by the Nebraska Attorney General’s office, MLex’s published summary of its 3 November article (not the full article), and KLKN-TV’s report of Hilgers’s statement. Claims about OpenAI are the state’s allegations. The 14 count and the 25 times and $10,000 comparisons are ours. We did not contact OpenAI or the attorney general’s office.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
