Musk seeks up to $134B in damages from OpenAI, Microsoft
What's the story
Elon Musk is seeking damages between $79 billion and $134 billion from OpenAI and Microsoft, according to Bloomberg. The tech mogul alleges that the AI company deceived him by abandoning its non-profit mission and collaborating with the software giant. The demand was revealed in a court document filed on Friday, after a federal judge denied OpenAI and Microsoft's last-ditch effort to avoid a jury trial scheduled for late April in Oakland, California.
Valuation basis
Claim based on OpenAI's current valuation
Musk's claim is based on OpenAI's current $500 billion valuation. He alleges that he was defrauded of the $38 million seed money he donated when co-founding the start-up in 2015. The damages demand was calculated by C. Paul Wazzan, a financial economist specializing in valuation and damages calculations in high-stakes disputes.
Contribution assessment
Musk's contributions to OpenAI considered in damage calculations
Wazzan's damage calculations consider both Musk's financial contributions and his technical/business advice to OpenAI. He estimates wrongful gains of $65.5 billion-$109.4 billion for OpenAI and $13.3 billion-$25.1 billion for Microsoft, which owns a 27% stake in the company today. The expert witness has been deposed nearly 100 times and testified at trial over a dozen times in complex commercial litigation cases.
Wealth disparity
Wealth dwarfs damages demand
Despite the staggering damages demand, it is worth noting that Musk's personal fortune is around $700 billion. This makes him the world's richest person by a wide margin. Even if OpenAI were to pay out $134 billion, it would be a small addition to his wealth. This could explain why OpenAI views the lawsuit as an "ongoing pattern of harassment" rather than a legitimate financial grievance.
Investor alert
OpenAI warns investors about Musk's claims
Ahead of the trial, OpenAI has warned its investors and business partners to expect "deliberately outlandish, attention-grabbing claims" from Musk. The case will be heard in Oakland, California, about 24km east of San Francisco. OpenAI and Microsoft have denied Musk's allegations while the former described his lawsuit as baseless and part of an ongoing pattern of harassment.