Elon Musk has escalated his long-running legal battle against OpenAI and Microsoft, filing court documents on January 17, 2026, seeking damages of up to $134 billion. The Tesla CEO and xAI founder alleges that the companies profited immensely from his early contributions to OpenAI, which he co-founded in 2015 as a nonprofit dedicated to safe AI development.
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Musk claims he provided around $38 million in seed funding—about 60% of the initial capital—along with recruiting talent, making key connections, and lending his credibility to the project. He left the organization in 2018 amid disagreements.
Key Allegations in the Filing
The core of Musk’s argument revolves around breach of contract and deviation from OpenAI’s original nonprofit mission. He accuses the company of converting to a for-profit structure, particularly through its close partnership with Microsoft, which invested billions and now holds a significant stake.
Musk’s expert witness, financial economist C. Paul Wazzan, calculated that OpenAI derived “wrongful gains” of $65.5 billion to $109.4 billion from his early support, while Microsoft benefited by $13.3 billion to $25.1 billion. Musk argues these figures reflect massive returns, similar to early investors in startups who reap outsized rewards.
He seeks disgorgement of these gains, plus potential punitive damages and other penalties. A federal judge in Oakland, California, recently allowed the case to proceed to a jury trial starting in April 2026.
Responses and Context
OpenAI has dismissed the lawsuit as “baseless” and part of an ongoing “harassment” campaign by Musk, who now competes directly through xAI and its Grok chatbot. Microsoft has denied aiding any breach, and both companies have challenged Musk’s expert calculations as “made up” and “implausible.”
The dispute highlights tensions in the AI industry over mission drift, competition, and massive valuations—OpenAI is reportedly worth around $500 billion.