Elon Musk has dramatically escalated his lawsuit against OpenAI and Microsoft, demanding between $79 billion and $134 billion in damages, according to a court filing submitted on January 16, 2026. The move comes after a federal judge ruled that the case will proceed to a jury trial in late April 2026, marking one of the most high-profile legal battles in the artificial intelligence industry.
Musk, who co-founded OpenAI in 2015, claims he was misled into supporting the organization based on assurances it would remain a non-profit focused on open-source AI for the benefit of humanity. Instead, OpenAI later transitioned into a capped-profit structure and formed a multi-billion-dollar partnership with Microsoft a shift Musk argues violated the organization’s founding principles.
Core Allegations Against OpenAI and Microsoft
At the center of the lawsuit is Musk’s claim that OpenAI and Microsoft generated massive “wrongful gains” using his early $38 million seed funding and non-monetary contributions, including technical guidance and recruitment efforts. His legal team argues that these profits should be disgorged, meaning returned, much like an early investor would reclaim gains derived from their foundational stake.
According to financial economist C. Paul Wazzan, OpenAI’s reported valuation of approximately $500 billion underpins the damages estimate. The breakdown includes $65.5 billion to $109.4 billion attributed to OpenAI and $13.3 billion to $25.1 billion to Microsoft, bringing the total demand to as much as $134.4 billion.
OpenAI and Microsoft Push Back
Both companies have dismissed Musk’s claims. OpenAI labeled the lawsuit “unserious” and accused Musk of attempting to undermine a competitor, referencing his own AI startup, xAI, which operates the chatbot Grok. Microsoft similarly denied any wrongdoing, stating there is no evidence it aided or abetted any alleged misconduct.
Judge Allows Case to Proceed
Although some of Musk’s claims were dismissed, U.S. District Judge Yvonne Gonzalez Rogers ruled that Musk has standing to sue and that a jury should decide whether OpenAI’s leadership knowingly misrepresented its charitable mission.
What Happens Next?
The jury trial is scheduled for late April 2026 in Oakland, California. If it proceeds, it could expose internal communications detailing OpenAI’s transition from a non-profit research lab to a dominant force in commercial AI a development that could reshape public understanding of Silicon Valley’s most powerful partnerships.
