Elon Musk sues OpenAI and Microsoft for $134bn over AI profits

Elon Musk has launched a $134 billion lawsuit against OpenAI and Microsoft, claiming both companies unjustly profited from his early backing of the artificial intelligence pioneer and abandoned its founding mission.

In a federal court filing on Friday, lawyers for Elon Musk said OpenAI gained between $65.5 billion and $109.4 billion as a result of Musk’s initial funding, reputation and strategic input after he co-founded the organisation in 2015. Microsoft, which owns an estimated 27 per cent stake in OpenAI, is alleged to have benefited by between $13.3 billion and $25.1 billion.

Musk’s legal team argues that without his early involvement, OpenAI, now best known for ChatGPT,  would not exist in its current form. His lawyer, Steven Molo, said Musk provided the “bulk of the seed funding”, lent credibility to the venture and shared expertise in scaling technology businesses.

Musk left OpenAI in 2018 following disagreements over its direction and governance. He now claims the company breached its original non-profit mission by restructuring itself into a more commercially oriented entity, a move designed to attract vast sums of capital to fund its AI ambitions.

OpenAI completed a major restructuring last year alongside Microsoft, valuing the business at $500 billion. Under the new structure, a non-profit OpenAI Foundation will hold equity in a for-profit arm that can raise funds from external investors.

OpenAI dismissed Musk’s claim as “unserious”, accusing him of running a sustained harassment campaign against the company. Microsoft and OpenAI jointly asked the court to restrict the evidence presented by Musk’s expert witness, financial economist C Paul Wazzan, arguing the damages estimates are speculative, unverifiable and misleading.

The companies contend that Musk’s attempt to reclaim “wrongful gains” amounts to an unprecedented transfer of value from a non-profit organisation to a former donor who is now a competitor in the AI race.

The case is due to be heard by a jury in Oakland, California, with the trial expected to begin in April. The dispute adds another chapter to the increasingly bitter rivalry between Musk and Sam Altman, and highlights the growing legal and commercial tensions surrounding the global AI boom.

Jamie Young

Jamie is Senior Reporter at Business Matters, bringing over a decade of experience in UK SME business reporting.
Jamie holds a degree in Business Administration and regularly participates in industry conferences and workshops.

When not reporting on the latest business developments, Jamie is passionate about mentoring up-and-coming journalists and entrepreneurs to inspire the next generation of business leaders.