AI giants officially face off in court: Musk seeks up to $134 billion in damages from OpenAI and Microsoft

Musk has officially filed a lawsuit in court, demanding that OpenAI and its partner Microsoft pay compensation ranging from $79 billion to $134 billion. The accusation claims that OpenAI has betrayed its original nonprofit mission, switched to a for-profit model, and formed a deep alliance with Microsoft—constituting fraud. The claimed amount is based on the company's current valuation of about $500 billion and the $38 million seed funding Musk provided in 2015.

The case is set to go to trial in late April in Oakland, California. Previously, a federal judge rejected a motion by OpenAI and Microsoft to avoid a jury trial. OpenAI responded that the lawsuit is “groundless” and stated it will refute the claims in court.

Musk's dispute with OpenAI began in 2024, centering on his dissatisfaction with co-founder Sam Altman transforming the company into a for-profit structure. Musk left OpenAI’s board in 2018 and founded his own AI company in 2023.

Claim Amount Based on Valuation Growth

According to Bloomberg, Musk’s lawyer Steven Molo cited the findings of financial economics expert C. Paul Wazzan in submitted court documents, indicating that Musk should receive a proportional share of OpenAI's current $500 billion valuation, to compensate for the $38 million seed funding he was fraudulently induced to invest in the past.

Molo wrote in the documents:

"Just as early investors in startups often receive returns far exceeding their original investments, the profits OpenAI and Microsoft obtained through improper conduct—which Musk now has the right to recover—also far exceed his initial contribution."

Wazzan’s valuation method took into account Musk’s financial support and non-financial contributions to OpenAI (including technical and business advice), ultimately calculating the range of unjust enrichment as $65.5 to $109.43 billion (OpenAI) and $13.3 to $25.06 billion (Microsoft). The documents also show Musk plans to pursue further punitive damages.

OpenAI's Transformation Sparks Controversy

Last October, OpenAI announced its restructuring plan, confirming that it had granted a 27% equity stake to long-term supporter Microsoft during the transition, while emphasizing that its nonprofit division still retains control over the for-profit business.

Regarding Musk’s lawsuit over this restructuring, OpenAI CEO Sam Altman previously criticized it as “weaponizing the legal system,” aiming to slow down competitors. In a recent statement, the company further claims that Musk's “non-serious claims are entirely for the purpose of advancing his harassment.”

As the developer of ChatGPT, OpenAI’s transformation from nonprofit to for-profit status has long been a focal point in the tech industry. The core of Musk’s lawsuit is questioning the legitimacy of this transformation, alleging that it has abandoned the original mission to “prioritize benefiting humanity.”

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