2 months ago
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Elon Musk is demanding that OpenAI Inc. and Microsoft pay him between $79 billion and $134 billion in damages, claiming the artificial intelligence company deceived him by moving away from its original nonprofit mission and forming a partnership with the tech corporation.
The damage claim was outlined in a court document filed Friday by Musk’s attorney, coming one day after a federal judge denied OpenAI and Microsoft’s last attempt to prevent a jury trial scheduled for late April in Oakland, California.
Expert calculates damages based on startup contribution
According to the filing, financial economist C. Paul Wazzan calculated that Musk deserves a portion of OpenAI’s present $500 billion value because he was allegedly cheated out of the $38 million in startup funds he gave when he helped establish the company in 2015.
“Just as an early investor in a startup company may realize gains many orders of magnitude greater than the investor’s initial investment, the wrongful gains that OpenAI and Microsoft have earned – and which Mr. Musk is now entitled to disgorge – are much larger than Mr. Musk’s initial contributions,” wrote Steven Molo, Musk’s attorney.
Musk departed from OpenAI’s board in 2018 and started his own artificial intelligence venture in 2023. He initiated legal proceedings in 2024 against Sam Altman regarding the OpenAI co-founder and chief executive’s intentions to transform the organization into a for-profit entity. Both OpenAI and Microsoft have rejected his accusations.
OpenAI calls lawsuit baseless harassment
“Mr Musk’s lawsuit continues to be baseless and a part of his ongoing pattern of harassment, and we look forward to demonstrating this at trial,” OpenAI stated. “This latest unserious demand is aimed solely at furthering this harassment campaign.”
OpenAI has cautioned investors to anticipate Musk making headline-grabbing statements as the case moves toward trial. Microsoft chose not to provide a statement.
The company behind ChatGPT revealed its reorganization in October, stating it had granted a 27% ownership share to its long-term supporter Microsoft in a change that would maintain the nonprofit division’s oversight of for-profit activities.
Altman has criticized Musk’s legal challenge to OpenAI’s reorganization as misusing the court system to hinder a business rival.
The expert witness Wazzan determined the damage amount by adding together Musk’s financial contributions and other non-monetary inputs, such as technical and business guidance, to OpenAI. His calculations show the alleged improper gains amount to $65.50 billion to $109.43 billion for OpenAI and $13.30 billion to $25.06 billion for Microsoft.
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