Elon Musk has asked a federal court to order OpenAI and Microsoft to hand over as much as $134 billion, arguing that the two companies reaped "wrongful gains" from his early financial and non‑monetary support for what began as a nonprofit research lab.
In a filing made public this week, Musk’s lawyers say his roughly $38 million in seed funding—about 60% of OpenAI’s early capital—plus his recruitment help, introductions and the prestige he lent the project amounted to the foundation that enabled OpenAI’s later multibillion‑dollar success. A financial expert retained by Musk, C. Paul Wazzan, put a value range on those alleged gains: roughly $65.5 billion to $109.4 billion attributable to OpenAI’s transformation, and an additional $13.3 billion to $25.1 billion tied to Microsoft’s involvement.
The numbers and the legal theory
This is not a typical damages claim. Instead of asking for a multiple of Musk’s initial outlay, the filing seeks disgorgement—forcing defendants to give up profits that Musk says were unjustly enabled by his early role. The complaint also leaves room to pursue punitive damages and injunctive relief if the jury finds liability.
Musk left OpenAI’s board in 2018 and later founded xAI, which competes in the same AI market as OpenAI. His lawyers argue that OpenAI’s pivot from its original nonprofit, public‑benefit framing into structures that let it commercialize technology—deepening ties with Microsoft—violated commitments and allowed both entities to profit off contributions Musk made when the project was nascent.
Pushback from OpenAI and Microsoft
OpenAI has publicly called the lawsuit "baseless" and framed it as part of an ongoing harassment campaign. Microsoft has pushed back as well, with lawyers saying there is no evidence the company "aided and abetted" OpenAI in any wrongdoing. In court filings, both defendants have asked the judge to limit or exclude Musk’s expert testimony, calling the valuation approach "unverifiable" and warning it could mislead jurors.
A recent ruling from a judge in Oakland cleared the way for a jury trial expected to start in April, meaning the dispute will now be decided in open court rather than through pretrial dismissals. Bloomberg reported that OpenAI and Microsoft had lost what the companies described as a last chance to avoid trial, making a courtroom showdown more likely.
High stakes and high drama
The dollar figure—$134 billion as framed in headlines—has given the case an almost surreal edge. To put it in perspective, that sum approaches the market value of some of the largest tech companies, and is several times larger than the early investment Musk says he made. Commentators have noted the spectacle: a founder turned rival asking for sums that dwarf typical startup disputes.
The case has also drawn attention in the public markets and prediction venues. A market on Kalshi briefly showed rising odds of a Musk victory after the trial date announcement; Musk amplified that sentiment on his social platform, posting a combative line about having "never lost a war." Prediction markets reflect sentiment, not legal probability, but they underscore how much interest this fight has attracted beyond traditional legal observers.
Why this matters beyond the courtroom
At its core, the lawsuit raises questions about how early philanthropic‑style funding and reputational capital should be treated when a mission‑oriented organization later pursues commercial paths. If Musk’s disgorgement theory gains traction, it could prompt founders, donors and nonprofits to rethink governance, donor agreements and how mission constraints are written—especially in AI, where commercial opportunities and public‑benefit promises collide.
There are also competitive implications. Microsoft’s investments and collaboration with OpenAI have been central to its AI strategy; any successful claim against Microsoft would be disruptive. And for Musk, who now runs xAI, the suit is both a legal claim and an aggressive stance in a marketplace that has fragmented into powerful corporate players and newer entrants.
The courtroom calendar and what to watch
The trial is slated for April in federal court in Oakland. Expect the dueling experts—Musk’s valuation witness and the defendants’ challengers—to be a focal point: judges and juries will have to parse complex valuations and whether a former donor can credibly claim entitlement to a slice of a company’s exponential growth.
Beyond the technical accounting, look for testimony about the early days of OpenAI: who recruited whom, what promises were made, and how founding documents were drafted and later revised. Those human details may matter as much as the spreadsheet math.
This fight is unlikely to resolve quickly. Even after a verdict, appeals could stretch the dispute for years. Meanwhile, the industry will keep watching. How the courts treat founder contributions, nonprofit governance and the transfer of intellectual and reputational capital into commercial success could shape the next round of AI deals.
More context on the companies involved: OpenAI has been rolling out new consumer products and features such as Sora for Android, part of broader debates about deepfakes and brand rights that the company faces as it commercializes research OpenAI’s Sora lands on Android. Microsoft, for its part, continues to develop in‑house AI models and tooling—recent work includes its MAI image model—highlighting why the partnership with OpenAI has been strategically important Microsoft’s MAI‑Image‑1 model.
The coming months will make clearer whether this will be remembered as a landmark legal rebuke, an overreaching claim that fizzles, or something in between. Either way, it has already reframed how founders and donors will think about exits, governance and the price of seeding an idea that later becomes a business juggernaut.