Musk seeks up to $134 billion from OpenAI and Microsoft

Elon Musk sues OpenAI and Microsoft

Jan 17 (Reuters) – Elon Musk is seeking up to $134 billion from OpenAI and Microsoft (MSFT.O), opens new tab, saying he deserves the “wrongful gains” that they received from his early support, according to a court filing on Friday. OpenAI gained between $65.5 billion and $109.4 billion from the billionaire entrepreneur’s contributions when he was co-founding what was then a startup from 2015, while Microsoft gained between $13.3 billion and $25.1 billion, Musk said in the federal court filing, opens new tab ahead of his trial against the two companies.

“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. A pre-eminent expert quantified the value of that,” Musk’s lead trial lawyer Steven Molo said in a statement to Reuters. OpenAI in a statement called it an “unserious demand” by Musk and part of what it said was his “harassment campaign” against OpenAI. Microsoft did not respond to a request for comment outside business hours on the amount of compensation Musk is seeking.

MICROSOFT AND OPENAI ALSO FILE SUITS

During the week, OpenAI called the lawsuit “baseless” and part of a “harassment” campaign by Musk. A Microsoft lawyer has said there is no evidence that the company “aided and abetted” OpenAI. The two companies challenged Musk’s damages claims in a separate filing on Friday. Musk, who left OpenAI in 2018 and runs xAI with its competitor chatbot Grok, alleges that ChatGPT operator OpenAI violated its founding mission in a high-profile restructuring to a for-profit entity. A judge in Oakland, California, ruled this month that a jury will hear the trial, expected to start in April.

Musk’s filing says he contributed about $38 million, 60% of OpenAI’s early seed funding, helped recruit staff, connect the founders with contacts and lend credibility to the project when it was created. “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,” Musk argues.

The filing says Musk’s contributions to OpenAI and Microsoft were calculated by his expert witness, financial economist C. Paul Wazzan. Musk may seek punitive damages and other penalties, including a possible injunction, if the jury finds either company liable, the filing says, without specifying what form any injunction might take. In their own filing, OpenAI and Microsoft asked the judge to limit what Musk’s expert may present to jurors, arguing his analysis should be excluded as “made up,” “unverifiable” and “unprecedented” and as seeking an “implausible” transfer of billions from a nonprofit to a former donor-turned-competitor. The companies also disputed Musk’s damages figures more broadly, saying the expert’s approach is unreliable and could mislead the jury.

Credit: reuters.com