Elon Musk accused of making up math to squeeze $134B from OpenAI, Microsoft

Elon Musk has initiated a high-stakes lawsuit against OpenAI, claiming that the organization has strayed from its original nonprofit mission, and he feels misled as an early investor. Recently, Musk filed a notice detailing his demand for damages, estimating them to range between $79 billion and $134 billion. This staggering amount is directed not only at OpenAI but also at its principal investor, Microsoft, which is co-defending in the case. In his legal approach, Musk has engaged a new expert witness, C. Paul Wazzan, who has provided a valuation based on Musk's early financial involvement with OpenAI. Wazzan asserts that Musk’s contributions could account for 50 to 75 percent of the current worth of the nonprofit. His calculations hinge on several key elements: Musk's total financial investment before his departure from OpenAI in 2018, his proposed equity stake in 2017, his existing equity in xAI, and his non-financial contributions, such as the time invested and his influential reputation. The enormity of Musk's claim has sent shockwaves through both OpenAI and Microsoft, which may also face punitive damages if the lawsuit results in a loss. The tech companies have responded by filing a motion to dismiss Wazzan's calculations, arguing that they could unfairly bias a jury. They contend that Wazzan's mathematical approach appears to be fabricated, based on methods he has never utilized before and seemingly tailored to please Musk. Further complicating the situation, OpenAI points out that Wazzan's calculations rely on a hypothetical scenario where Musk would have been granted a 51.2 percent stake in a for-profit entity—an arrangement that was never finalized. This raises questions about the legitimacy of Musk's claims for damages based on an agreement that was never reached, as highlighted by OpenAI's defense.