Published on: 20 January , 2026 21:09 IST
In Elon Musk versus OpenAI and Microsoft war, Tesla tycoon is gunning for up to $134 billion in “wrongful gains.” If you’re hooked already, buckle up- this legal showdown is packed with twists, high-stakes accusations, and enough drama to rival a sci-fi blockbuster. Let’s dive in and uncover why Musk claims he’s owed a fortune, and what laws he’s wielding like a lightsaber in this battle.
From Nonprofit Dream to For-Profit Empire
It all started in 2015 when Elon Musk, already a legend in the tech world with Tesla and SpaceX under his belt, co-founded OpenAI. Back then, it was a nonprofit lab dedicated to advancing AI “in the way that is most likely to benefit humanity as a whole,” free from the shackles of profit motives. Musk didn’t just lend his name; he ponied up about $38 million—60% of the early seed funding- recruited top talent, connected the founders to his elite network, and lent his star power to give the project credibility. As his lead trial lawyer, Steven Molo, put it in a statement: “Without Elon Musk, there’d be no OpenAI. He provided the bulk of the seed funding, lent his reputation, and taught them all he knows about scaling a business.”
But here’s where the plot thickens. Musk bolted from OpenAI in 2018, launching his own AI venture, xAI, and its chatbot Grok. Meanwhile, OpenAI underwent a “high-profile restructuring” to become a for-profit entity, cozying up with Microsoft in a partnership that’s poured billions into the ChatGPT creator. Musk alleges this shift betrayed the company’s founding mission, turning it into a profit-driven machine that sidelined the public good. Now, he’s suing, claiming OpenAI reaped $65.5 billion to $109.4 billion from his contributions, while Microsoft pocketed $13.3 billion to $25.1 billion. Total ask? A jaw-dropping $79 billion to $134 billion, based on calculations from financial economist C. Paul Wazzan, who ties it to OpenAI’s current $500 billion valuation.
OpenAI isn’t taking this lying down. They dismissed Musk’s demand as an “unserious” part of his “harassment campaign,” calling the lawsuit “baseless.” Microsoft, for its part, has stayed mum on the specifics but argues there’s no evidence they “aided and abetted” any wrongdoing. Both companies have fired back in court, challenging Musk’s expert analysis as “made up,” “unverifiable,” and “unprecedented,” and seeking to limit what jurors hear.
What Laws Is Musk Invoking?
At the heart of this feud isn’t just bruised egos it’s a arsenal of serious legal claims designed to claw back what Musk sees as ill-gotten gains. Musk’s lawsuit, filed in federal court in Oakland, California, and set for a jury trial in April, draws on a mix of contract law, fiduciary duties, fraud allegations, and even antitrust heavyweights. Here’s a breakdown of the key laws and causes of action he’s quoting, straight from the filings:
Musk argues OpenAI violated its founding agreement by prioritizing profits over public benefit. This falls under California contract law, specifically drawing on principles from the California Civil Code (e.g., Sections 1643 and 3300), which require contracts to be performed in good faith and allow damages for breaches that cause harm. He claims the shift to for-profit status and Microsoft partnership breached the “false promises” of staying nonprofit and open-source.
As a co-founder and early donor, Musk alleges OpenAI’s leaders, like CEO Sam Altman and President Greg Brockman, owed him duties of loyalty and care. This is grounded in common law principles, often applied under Delaware law (where OpenAI is incorporated), requiring directors to act in the best interest of the organization’s mission. The suit accuses them of using assets for private gain instead of humanity’s benefit.
Musk expanded his claims to include fraud (e.g., misleading him about the nonprofit commitment) and unjust enrichment, where defendants profited unfairly from his contributions without compensation. These are common law claims, supported by California Civil Code Section 1572 for actual fraud and case law like Ghirardo v. Antonioli (1996) for unjust enrichment, allowing disgorgement of wrongful gains.
In an amended complaint, Musk added federal antitrust claims against both OpenAI and Microsoft, alleging they illegally monopolized the generative AI market. This invokes the Sherman Antitrust Act (15 U.S.C. §§ 1-2), which prohibits contracts that restrain trade and attempts to monopolize. Specifically, he claims they conditioned investments on agreements not to deal with competitors, sidelining rivals like his own xAI.
Musk isn’t stopping at cash—he’s eyeing punitive damages, penalties, and even an injunction to void OpenAI’s Microsoft license and force divestment of those “ill-gotten” billions. As he argues in the filing: “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.”
A Legal battle on AI
This isn’t just about money; it’s a clash over the future of AI. Musk, ever the provocateur, warns that unchecked corporate greed could doom humanity’s shot at safe, beneficial intelligence. OpenAI counters that Musk’s suit is overreaching and baseless, part of a competitor’s smear campaign. With a jury trial looming in April, the outcome could reshape AI governance, investor rights, and Big Tech partnerships.
Will Musk emerge victorious, pocketing billions and forcing OpenAI back to its roots? Or will this be dismissed as sour grapes from a jilted co-founder? One thing’s for sure: This lawsuit is the tech world’s hottest ticket, blending betrayal, billions, and the fate of AI. Stay tuned the verdict could change everything. What do you think: Hero or hypocrite? Drop your take below!