Elon Musk vs OpenAI, Microsoft: Why xAI Founder seeks $134B in ‘wrongful gains’

Elon Musk has entered a legal dispute with tech giants, OpenAI and Microsoft, seeking compensatory damages in the range of $79 billion to $134 billion over defrauding allegations.

Musk’s lawyer detailed the damages request in a court filing, arguing that xAI owner was an “early investor” so he is entitled to a portion of OpenAI’s current $500 billion valuation.

According to an expert witness, Paul Wazzen, these figures are based on both Musk’s financial and non-monetary contributions, including technical and business advice.

Core allegations

According to the 54-year-old billionaire, the ChatGPT maker company defrauded him by abandoning its original nonprofit mission. It also partnered with Microsoft to achieve its profit-making agenda.

Musk lawyers also contend that the “wrongful gains” earned by OpenAI and Microsoft should be handed over to him.

Musk lawyer Steven Molo wrote, “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 & Microsoft responses

OpenAI has denied the allegations and dismissed the lawsuit as baseless and misleading.

Sam Altman said in a statement, “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,” the CEO added.

According to Altman, Musk is using the legal system for his own advantage in order to slow down a competitor in the tech landscape.

However, Microsoft has declined to comment.

A jury trial is now set for late April in Oakland, California after a federal judge rejected a final bid by OpenAI and Microsoft to evade a trial.

Elon Musk left OpenAI’s board in 2018. In 2023 he launched his AI company, xAI and initiated the legal battle in 2024.