A federal judge in California will hear arguments on Friday about whether jurors should be allowed to consider a damages theory worth as much as $135 billion in Elon Musk’s lawsuit against Sam Altman and OpenAI, as the closely watched case heads toward trial this spring.
The hearing before U.S. District Judge Yvonne Gonzalez Rogers will focus on whether Musk’s damages expert can testify at trial about how much value Musk allegedly helped create during OpenAI’s early years. Musk, who contributed roughly $38 million to OpenAI in the mid-2010s, alleges the artificial intelligence company backtracked on its initial “nonprofit research” business model and that he is now owed upwards of $100 billion.
Lawyers for OpenAI and its partners are asking Rogers to exclude portions of economist C. Paul Wazzan’s testimony, arguing that his calculations are based on an unreliable methodology and should be barred under federal rules governing expert witnesses.
At the center of the dispute is Wazzan’s conclusion that Musk could be entitled to between roughly $78 billion and $135 billion in damages if he ultimately prevails at trial.
According to the 28-page defense filing from Jan. 16, Wazzan estimated that Musk should receive $65.5 billion to $109.4 billion tied to the value of OpenAI’s nonprofit foundation, plus an additional $13.3 billion to $25.1 billion related to alleged gains involving Microsoft, which has invested billions in OpenAI’s commercial operations.
OpenAI’s attorneys say those figures stem from a novel damages theory that attempts to assign Musk a large share of the organization’s current value for his early financial backing and involvement.
Wazzan’s analysis asserts that Musk’s contributions account for 50% to 75% of the nonprofit organization’s value, based on factors such as Musk’s financial donations, his role as a co-founder, and alleged nonmonetary contributions during the company’s formative years.
But lawyers for OpenAI argue the methodology is flawed and should not be presented to a jury.
In their motion, the defendants say the expert effectively treats Musk as if he held an equity stake in the nonprofit organization — something they argue is legally impossible because nonprofit group donors do not receive financial ownership interests.
The filing also contends that the model ignores the contributions of other founders, employees, investors, and business partners who helped build the company.
“Donors to a nonprofit do not expect a financial return,” the motion states, while acknowledging Musk’s nearly $40 million contribution to OpenAI during its early years.
The hearing will determine whether the jury can hear those damage estimates when the case goes to trial.
Musk filed the lawsuit in August of 2024, accusing OpenAI and Altman of abandoning the company’s founding mission as a nonprofit research lab devoted to developing AI for the benefit of humanity.
Musk, who helped establish OpenAI in 2015 but left the company in 2018, says he donated tens of millions of dollars based on assurances that the organization would remain not-for-profit and keep its technology broadly accessible.
Instead, OpenAI later created a for-profit subsidiary and secured billions of dollars in investment from Microsoft as it raced to develop powerful generative AI systems.
OpenAI and Altman deny wrongdoing and argue Musk was aware of the company’s evolving structure years earlier. The company has also suggested that the lawsuit is part of Musk’s broader rivalry with OpenAI, following the launch of his own competing AI venture, xAI, in 2023.
According to OpenAI’s website, the company was “founded as a nonprofit, is today a nonprofit that oversees and controls the for-profit, and going forward will remain a nonprofit that oversees and controls the for-profit. That will not change.”
The case in January survived an earlier effort by OpenAI to have it dismissed. At the beginning of the year, Rogers ruled that Musk’s fraud claims could proceed to trial, finding there was enough evidence for a jury to weigh whether Musk had been misled about the company’s long-term structure.
The trial is currently scheduled to begin on April 27 and run through the end of May.
Friday’s hearing will not decide the merits of Musk’s claims but could significantly shape the trial by determining whether jurors are allowed to hear the massive damages estimates tied to Musk’s alleged contributions.
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With OpenAI now valued in the hundreds of billions of dollars and AI emerging as one of the most consequential technologies of the decade, the courtroom clash between Musk and Altman is expected to be one of the most closely watched legal battles in Silicon Valley.
Lawyers for Musk and Altman did not return a request for comment.
