Tech billionaire Elon Musk has launched a staggering legal claim against artificial intelligence leader OpenAI and its major partner, Microsoft. In a court filing, Musk's legal team is seeking damages ranging from $79 billion to $134 billion. The lawsuit, which is now headed for a jury trial, alleges that OpenAI defrauded Musk by abandoning its original non-profit mission.
The Core of the Legal Battle
The dispute centers on OpenAI's foundational principles. Musk, who was a co-founder and provided $38 million in seed funding in 2015, claims the company was established as a non-profit to develop AI for the benefit of humanity. The lawsuit argues that OpenAI's close partnership with Microsoft and its transition to a for-profit model, capped by a major restructuring in October 2025, constitutes a breach of this founding agreement.
Musk's lawyer, Steven Molo, detailed the damages request on Friday, January 16, 2026. The filing came just one day after a federal judge in Oakland, California, rejected a final attempt by OpenAI and Microsoft to avoid a jury trial. The trial is now scheduled to begin in late April.
Calculating a Historic Damages Figure
The eye-popping damages figure was calculated by Musk's financial expert witness, C. Paul Wazzan. The calculation is based on the premise that Musk is entitled to a portion of OpenAI's current $500 billion valuation, as compensation for being defrauded of his initial contribution and his ongoing involvement.
"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," Molo wrote in the filing.
Wazzan's analysis breaks down the alleged wrongful gains as $65.50 billion to $109.43 billion for OpenAI and $13.30 billion to $25.06 billion for Microsoft. The filing also states that Musk plans to seek punitive damages on top of these amounts.
Escalating Tensions in the AI Industry
The legal battle is the culmination of years of rising tensions. Musk left OpenAI's board in 2018 and later founded his own AI company, xAI, in 2023. He initiated this court fight in 2024, targeting OpenAI CEO Sam Altman's plans to operate the company for profit.
OpenAI has vehemently denied the allegations. In a statement, the company called Musk's lawsuit "baseless" and part of "his ongoing pattern of harassment." They added, "This latest unserious demand is aimed solely at furthering this harassment campaign." OpenAI has previously warned investors to expect dramatic claims from Musk as the trial approaches.
Microsoft, which was granted a 27% ownership stake in OpenAI during the 2025 restructuring, declined to comment on the latest filing. Altman has previously characterized Musk's lawsuit as a weaponization of the legal system to hinder a competitor.
This high-stakes case unfolds against a backdrop of immense investment in artificial intelligence. Industry spending is projected to reach nearly 2% of global GDP by 2026, highlighting the enormous financial and strategic interests at play in this landmark legal confrontation.
