Musk Sues OpenAI and Microsoft for Billions
Elon Musk has initiated a lawsuit against OpenAI and Microsoft, seeking damages that could range from $79 billion to $134 billion. He accuses the AI company, co-founded by Sam Altman, of straying from its nonprofit roots and committing fraud.
The legal claim, filed by Musk’s attorneys, comes after a federal judge recently dismissed OpenAI and Microsoft’s attempt to avoid a jury trial. This trial is set to begin in late April in Oakland, California.
According to Musk’s lawyer, Stephen Moro, an expert in financial economics, C. Paul Wazan, calculated that Musk deserves a share of OpenAI’s current valuation of $500 billion. Musk alleges he was defrauded out of $38 million he originally contributed as seed money when he helped establish OpenAI in 2015. Both OpenAI and Microsoft have contested these figures.
Moro elaborated on the rationale behind the substantial damages claim, likening it to early-stage investments. He emphasized that the profits OpenAI and Microsoft allegedly gained far exceed Musk’s initial contributions, mirroring how early investors often see returns much greater than what they initially put in.
The conflict traces back to Musk’s belief that OpenAI has violated its founding mission. He left the board of OpenAI in 2018 and launched his own AI venture in 2023. Musk even filed a lawsuit against Altman in 2024 regarding the shift to a profit-driven model, a move both OpenAI and Microsoft have denied any wrongdoing in.
In response, OpenAI characterized the lawsuit as unfounded and suggested that Musk is engaged in a continual harassment campaign against them. They expressed eagerness to defend themselves in court and labeled Musk’s recent actions as deceptive and aimed at pursuing that harassment.
Altman has publicly criticized Musk’s legal maneuvers as a misuse of the legal system meant to hinder competition. OpenAI cautioned investors that high-profile claims from Musk are likely as the case progresses.
In October, the company behind ChatGPT announced a restructuring plan, revealing it had given Microsoft a 27% stake to ensure that the nonprofit arm could still oversee the for-profit side of the business.
The legal documents also indicate Musk’s intention to seek punitive damages, potentially pursuing an injunction, though specifics on what that injunction would entail remain unclear.
