Elon Musk Seeks Billions in Damages From OpenAI and Microsoft as Legal Fight Heads to Trial

Court papers filed on Friday show Musk wants damages ranging from about $79 billion to $134 billion, a sum tied to claims that OpenAI defrauded him by shifting away from its nonprofit roots and aligning closely with Microsoft, per Reuters. The filing came a day after a U.S. federal judge declined a final effort by OpenAI and Microsoft to avoid a jury trial scheduled for late April in Oakland, California.

According to Reuters, Musk’s legal team based the damages request on an analysis prepared by financial economist C. Paul Wazzan, who was retained as an expert witness. The filing argues that Musk should be compensated based on OpenAI’s current valuation of roughly $500 billion, asserting that he was deprived of the upside he would have received after contributing about $38 million in seed funding 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,” Musk’s lawyer Steven Molo wrote in the filing.

Musk stepped down from OpenAI’s board in 2018 and later launched his own artificial intelligence company in 2023. He began legal action in 2024, accusing OpenAI Chief Executive Sam Altman of steering the organization toward a for-profit model that Musk says conflicts with its founding principles, according to Reuters. OpenAI and Microsoft have denied the allegations and challenged the damages calculations.

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Related: Judge Clears Way for Jury Trial in Musk’s Lawsuit Against OpenAI

OpenAI pushed back sharply against Musk’s latest filing. “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,” the company said in a statement. “This latest unserious demand is aimed solely at furthering this harassment campaign.”

Altman has previously criticized Musk’s lawsuit as an attempt to use the courts to hinder a rival, while OpenAI has cautioned investors to expect high-profile claims from Musk as the case moves toward trial, per Reuters.

OpenAI, best known for its ChatGPT chatbot, announced a restructuring plan in October that included granting Microsoft a 27% ownership stake, while maintaining nonprofit control over the company’s for-profit arm, according to Reuters.

Wazzan’s analysis, cited in the court filing, combined Musk’s financial backing with non-monetary contributions such as technical guidance and business advice. He estimated alleged wrongful gains of between $65.5 billion and $109.4 billion for OpenAI, and $13.3 billion to $25.1 billion for Microsoft.

Musk’s lawyers also said he may pursue punitive damages and potentially seek an injunction, though details of such a request were not specified, according to Reuters.

In a court response filed early Saturday, OpenAI and Microsoft urged the judge to exclude Wazzan’s testimony, arguing that his conclusions lack a sound basis. “Wazzan’s methodology is made up; his results unverifiable; his approach admittedly unprecedented; and his proposed outcome — the transfer of billions of dollars from a nonprofit corporation to a donor-turned competitor — implausible on its face,” lawyers for the companies wrote.

Source: Reuters