Elon Musk is seeking a staggering $79 billion to $134 billion in damages from OpenAI and Microsoft, claiming the AI companies defrauded him by abandoning their nonprofit mission, Bloomberg first reported. That figure comes from expert witness C. Paul Wazan, a financial economist who, according to his bio, has been deposed nearly 100 times in complex commercial cases and testified more than a dozen times in court.
Wazan, who specializes in valuations and calculating damages in high-stakes disputes, determined that Musk is entitled to a significant portion of OpenAI’s current valuation of $500 billion based on the $38 million seed donation Musk made when he co-founded the startup in 2015 (in case you were wondering, that would mean a 3,500x return on Musk’s investment).
Wazzan’s analysis calculates that Musk’s initial financial contributions, combined with the technical know-how and business contributions he provided to OpenAI’s initial team, amounted to between $65.5 billion and $109.4 billion in ill-gotten gains for OpenAI and between $13.3 billion and $25.1 billion for Microsoft, which currently owns 27% of the company.
Musk’s lawyers argue that he should be compensated as an early startup investor with a potential return “many orders of magnitude greater” than his initial investment. But the scale of the damages claims underscores that this legal battle is not really about money.
Mr. Musk’s personal wealth is currently around $700 billion, making him the richest person in the world. As Reuters recently pointed out, his fortune now exceeds that of Google co-founder Larry Page, the world’s second-richest person, by $500 billion, according to the Forbes Rich List. In November, Tesla shareholders individually approved a $1 trillion pay package for Musk, the largest corporate pay package in history.
Against this backdrop, even the $134 billion payout from OpenAI represents a relatively modest addition to Musk’s wealth, and is likely to strengthen, for OpenAI officials, their characterization of the lawsuit as part of an “ongoing pattern of harassment” rather than a legitimate financial grievance. OpenAI had reportedly already sent a letter to investors and other business partners on Thursday warning that Musk would make “deliberately outlandish and attention-grabbing claims” as he prepares his case against the company for trial in April. The case will be heard in Oakland, California, about 25 miles east of San Francisco.
