Elon Musk is seeking between $79 billion and $134 billion in damages from OpenAI Inc. and Microsoft. He alleges the companies misled him about the future of the artificial intelligence firm he helped create. Court filings indicate the lawsuit could become one of the most significant legal disputes in the rapidly evolving AI industry.
In brief
- Musk claims that OpenAI's shift to a for-profit model violated its original mission and allowed others to benefit from its early support.
- Court filings show the damage estimate is tied to OpenAI's reported $500 billion valuation and Microsoft's growing financial stake.
- The lawsuit is progressing toward a jury trial after a judge rejected efforts by OpenAI and Microsoft to block the proceedings.
- OpenAI denies all allegations, while Altman says the lawsuit aims to curb competition in the AI sector.
Jury to rule on Musk's claims over OpenAI's governance and for-profit structure
At the heart of the dispute is OpenAI's transition from its original nonprofit structure to a model closely aligned with a major corporate partner. Musk argues that this change violated the organization's founding mission and allowed others to profit from the early contributions he made.
The claim for damages was filed Friday before a federal court. Notably, this came a day after a judge rejected attempts by OpenAI and Microsoft to block a jury trial scheduled for late April in Oakland, California. Musk's legal team maintains that his financial and strategic support during OpenAI's early years played a crucial role in creating value that later benefited both companies.
The damage estimate was prepared by financial economist C. Paul Wazzan. His analysis builds on the reported $500 billion valuation for OpenAI and early support from Musk. Support included approximately $38 million in funding when the organization launched in 2015, as well as technical and business advice.
Depending on the filing, the damage calculation considers several factors:
- Musk's early financial contributions;
- His technical and strategic contribution during the formation of OpenAI;
- Growth in company valuation following key partnerships;
- The financial gains linked to Microsoft's involvement;
- Lost opportunities resulting from the shift to a for-profit model.
Musk left OpenAI's board in 2018 and later launched a competing artificial intelligence company in 2023. He filed a lawsuit in 2024, naming OpenAI co-founder and chief executive Sam Altman in connection with plans to expand for-profit operations. OpenAI and Microsoft have denied all allegations of deception or misconduct.
Altman says Musk's lawsuit aims to curb competition
OpenAI called the lawsuit baseless and a broader attempt to undermine the company. A spokesperson said the claims lack merit and will be challenged at trial. The company also warned investors that Musk may continue to make public statements as the case progresses.
In October, OpenAI unveiled a restructuring plan that gave Microsoft a 27% stake while retaining nonprofit oversight of its business operations. The company said the changes were intended to support long-term research initiatives, including products such as ChatGPT. Altman criticized Musk's lawsuit, describing it as an attempt to curb competition through legal proceedings.
Wazzan's analysis estimates that OpenAI received between $65.5 billion and $109.43 billion in improper gains, with Microsoft's share ranging from $13.3 billion to $25.06 billion. A jury will ultimately decide whether these claims stand up to legal scrutiny.
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