Musk pointed out that OpenAI, which initially presented itself as a non-profit entity, abandoned this stance by partnering with Microsoft. OpenAI retorted that Musk himself had previously proposed the company transition to a for-profit model.
American entrepreneur Elon Musk has initiated a lawsuit against OpenAI and Microsoft, demanding the companies compensate him between $79 billion and $134 billion, according to the entrepreneur’s filing publicized by Reuters.
Musk asserts that OpenAI, which originally positioned itself as a non-profit organization, has reneged on those principles, a shift exemplified by its partnership with Microsoft.
In the plaintiff’s view, OpenAI’s revenues were generated thanks to his decisive contributions toward the creation and advancement of OpenAI. This contribution is appraised both in monetary terms and non-material assets, such as attracting key personnel, knowledge transfer, and lending his reputation and connections.
To quantify the disputed earnings, Musk enlisted the evaluation of an expert—financial economist Paul Wazzan. Utilizing financial models and drawing on his own venture capital investment experience, Wazzan calculated that Musk’s stake amounts to between 50% and 75% of the current valuation of the non-profit arm of OpenAI, which stands at $500 billion. According to Musk’s claim, during the period starting in 2015 when he co-founded OpenAI, the company received contributions from him totaling between $65.5 billion and $109.4 billion. Microsoft, conversely, invested between $13.3 billion and $25.1 billion into OpenAI.
Musk served as co-chair of OpenAI alongside its current CEO, Sam Altman. The company was established in 2015. Musk departed from OpenAI’s board of directors in 2018. Five years later, he founded his own artificial intelligence development firm, xAI, and in 2024, launched legal proceedings against Altman. The bone of contention relates to Altman’s commercial plans for steering the company, notably its collaboration with Microsoft.
Musk’s company, xAI, is focused on developing the Grok chatbot, which competes with OpenAI’s ChatGPT.
“Just as an early investor in a startup might see returns many times over their initial investment, the ill-gotten gains that OpenAI and Microsoft have earned, and which Mr. Musk now seeks to reclaim, far exceed Mr. Musk’s initial investments,” stated Musk’s lawyer, Stephen Mollo, as reported by Bloomberg.
In its countering statement to Musk, OpenAI asserted that in 2017, discussions were held with him regarding a pivot to a for-profit structure, but these talks ceased when OpenAI declined to grant him full control and rejected a proposed merger with Tesla. Following his departure, the organization was compelled to independently seek billions in external investment, the company’s press service noted. Ultimately, OpenAI was structured to operate in the public interest while being overseen by a non-profit board.
The company also highlighted that this lawsuit represents Musk’s fourth attempt to “stymie the progress” of OpenAI and promote his own xAI venture, asserting that he systematically distorts facts as part of this strategy. “Elon did not believe OpenAI should remain purely a non-profit organization. <…> He agreed that OpenAI required both a non-profit and a for-profit structure—precisely the structure OpenAI has today, and the very reason why Elon is suing OpenAI now,” the company’s statement read.
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