Elon Musk is seeking between $79 billion and $134 billion in damages from OpenAI and Microsoft, alleging that the AI company defrauded him by abandoning its original nonprofit mission, according to a Bloomberg report citing a newly submitted expert analysis.
Damages Calculation And Expert Testimony
The damages figure was calculated by C. Paul Wazzan, a financial economist serving as an expert witness for Musk. Wazzan’s professional biography states he has been deposed nearly 100 times and testified in more than a dozen complex commercial litigation trials, with a focus on valuation and damages assessments.
Wazzan concluded that Musk is entitled to a substantial share of OpenAI’s current estimated $500 billion valuation. The analysis is based on Musk’s $38 million seed contribution when he co-founded OpenAI in 2015, combined with what the report describes as his technical input and business contributions to the company’s early development. The calculation implies a return of roughly 3,500 times Musk’s original investment.
Allocation Of Alleged Wrongful Gains
According to the analysis, OpenAI is said to have realized wrongful gains ranging from $65.5 billion to $109.4 billion, while Microsoft is attributed gains of between $13.3 billion and $25.1 billion. Microsoft currently owns about 27% of OpenAI.
Musk’s legal team argues that, as an early backer of a startup, he is entitled to returns that can exceed an initial investment by several orders of magnitude if the company succeeds.
Context Of Musk’s Personal Wealth
The scale of the damages claim stands out against Musk’s existing wealth. His personal fortune is estimated at around $700 billion, making him the world’s richest individual. Reuters recently reported that his net worth exceeds that of Google co-founder Larry Page, the second-richest person globally, by about $500 billion, based on Forbes data.
In November, shareholders of Tesla approved a compensation package for Musk valued at $1 trillion, described as the largest corporate pay package in history.
OpenAI’s Response And Upcoming Trial
OpenAI has characterized the lawsuit as part of what it described as an ongoing pattern of harassment rather than a legitimate financial dispute. CNBC reported that the company sent a letter to investors and business partners warning that Musk is likely to make deliberately provocative claims as the case moves toward trial.
The lawsuit is scheduled to be heard in April in Oakland, California, roughly 15 miles east of San Francisco.
Featured image credits: Flickr
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