Elon Musk is seeking substantial damages ranging from $79 billion to $134 billion from OpenAI Inc. and Microsoft, alleging that the generative AI company defrauded him by abandoning its foundational nonprofit mission and subsequently partnering with the software giant. This significant damages request was detailed in a court filing by Musk’s lawyer, Steven Molo, on a Friday, following a federal judge's rejection of a final attempt by OpenAI and Microsoft to avoid a jury trial. The trial is scheduled to commence in late April in Oakland, California.

According to calculations presented by financial economist expert witness C. Paul Wazzan, Musk contends he is entitled to a portion of OpenAI's current $500 billion valuation. This claim stems from his assertion that he was defrauded of the $38 million in seed money he contributed when he co-founded the startup in 2015. Molo emphasized this point, stating, "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.” OpenAI and Microsoft have disputed these calculations.

Musk departed from OpenAI’s board in 2018. He later launched his own artificial intelligence company in 2023 and initiated legal action in 2024 against Sam Altman, OpenAI co-founder and CEO, over plans to operate the company as a for-profit entity. Both OpenAI and Microsoft have vehemently denied Musk’s allegations. OpenAI released a statement asserting, “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. This latest unserious demand is aimed solely at furthering this harassment campaign.” Altman has publicly characterized Musk’s lawsuit, which challenges OpenAI’s restructuring, as an attempt to weaponize the legal system to hinder a competitor. OpenAI has also forewarned investors to anticipate attention-grabbing claims from Musk as the legal dispute progresses toward trial.

OpenAI, widely recognized as the developer of ChatGPT, announced its restructuring in October. At that time, it disclosed a 27% ownership stake granted to its long-standing supporter, Microsoft. This restructuring aimed to maintain the startup’s nonprofit arm in control of its for-profit operations. Expert witness Wazzan’s methodology for calculating the damages involved combining Musk’s financial contributions with his non-monetary inputs, such as technical and business advice provided to OpenAI. He determined the wrongful gains to be between $65.50 billion and $109.43 billion for OpenAI, and an additional $13.30 billion to $25.06 billion for Microsoft. Musk's legal filing also indicates his intention to seek punitive damages and potentially an injunction, though the specifics of the latter were not described in the filing.

In a counter-response filed in court on Saturday, OpenAI and Microsoft strongly challenged Wazzan’s conclusions. They requested that he be barred from presenting these findings at trial, arguing that Musk is seeking an amount up to 2,900 times his original investment in the startup. Lawyers representing the companies critiqued Wazzan’s methodology, stating, “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.”