Elon Musk has sued OpenAI and Microsoft. He is asking for between $79 billion and $134 billion in damages, claiming that OpenAI defrauded him when it deviated from its nonprofit business model. The related legal proceedings will be held in Oakland, California, with trial currently set for April.
Musk co-founded OpenAI in 2015, Musk initially providing a $38 million seed investment. His legal team insists that he is entitled to get paid, just like an early-stage investor would. They’re quick to point out that a $134 billion payout would be a small increase on his already huge net worth of around $700 billion. This figure would yield an astounding 3,500-fold return on his original investment. Musk’s team insists he’ll end up with profits “many orders of magnitude larger” than the initial amount he put in.
Musk’s recent ascendance to the rank of the world’s richest person has helped make his bold claims newsworthy. Since then, shareholders at Tesla approved a pay package worth $1 trillion for Musk last November—which is how his wealth has ballooned. Unfortunately, his financial success shows no signs of stopping. His lawsuit against OpenAI and Microsoft is more than a cash grab. This showcases his profoundly held convictions that OpenAI has strayed far from the path it set on its founding.
OpenAI has reacted to the lawsuit by warning investors about what it describes as “deliberately outlandish, attention-grabbing claims” made by Musk. The organization maintains that its evolution from a nonprofit to a commercial entity is essential for advancing artificial intelligence responsibly. This shift has recently been decried by the project’s CEO, Elon Musk, who claims it betrays the core, noble purpose of OpenAI.
As one of the expert witnesses who participated in the case, C. Paul Wazzan calculated an estimate of damages that Musk might be awarded. To assess Musk’s influence, Chozick looks at his investments. Plus, he discusses the technical and business acumen Musk brought to OpenAI—at its inception. This valuable expert testimony will likely be crucial in deciding the fate of the lawsuit.
As the case develops, we hope that the focus broadens to consider the practical and financial impact on all participants. It raises serious questions about the ethics of commercialization of artificial intelligence. Musk is the one who is trying to get big damages. This litigation may set a new standard for how early-stage investors are protected in fast-moving technology industries.