Elon Musk is seeking between $79 billion and $134 billion in damages from OpenAI and Microsoft, claiming the companies defrauded him by abandoning the AI firm's nonprofit mission after he provided $38 million in seed funding representing 60% of OpenAI's early capital in 2015.
What Happened: Wrongful Gains Calculation
A federal judge in Oakland, California rejected a final dismissal motion by OpenAI and Microsoft on January 16, 2026, clearing the path for a jury trial set to begin in late April.
Musk's damages claim was calculated by expert witness C. Paul Wazzan, a financial economist who determined OpenAI gained between $65.5 billion and $109.4 billion from Musk's early contributions, while Microsoft gained between $13.3 billion and $25.1 billion. The total range of $79 billion to $134 billion is based on OpenAI's current $500 billion valuation and could increase if the company's valuation rises before trial.
"Without Elon Musk, there'd be no OpenAI. He provided the bulk of the seed funding, lent his reputation, and taught them all he knows about scaling a business," Musk's lead trial lawyer Steven Molo said in a statement. The filing argues Musk's contributions extended beyond capital to include recruiting key staff, connecting founders with contacts, and lending credibility to the project when it launched.
OpenAI dismissed the demand as "unserious" and part of Musk's "harassment campaign" against the company. Microsoft challenged the expert analysis as "made up," "unverifiable," and "unprecedented," arguing the methodology is unreliable and seeks an implausible transfer of billions from a nonprofit to a former donor turned competitor.
Why It Matters: Nonprofit Mission Under Scrutiny
The case centers on whether OpenAI violated its founding mission by restructuring into a for-profit entity deeply aligned with Microsoft. Musk left OpenAI's board in 2018 and launched competing AI company xAI in 2023, which operates the Grok chatbot.
Internal documents released during discovery show OpenAI co-founder Greg Brockman wrote in private notes in 2017 that he couldn't "see us turning this into a for-profit without a very nasty fight" with Musk. The legal battle has now materialized into one of the largest damage claims in AI industry history.
The trial will determine whether OpenAI used its nonprofit status to gain advantages including reputation, recruiting, and tax benefits while leadership planned a commercial pivot all along, or whether Musk left because he couldn't secure full control of the company's direction.
