Judge to Weigh $134 Billion Damages Theory as Musk-OpenAI Case Heads to Trial

A federal judge in California will hear arguments 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. 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.

Expert Witness Under Fire

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.

In their own filing, OpenAI and Microsoft asked the judge to limit what Musk’s expert may present to jurors, arguing his analysis should be excluded as “made up,” “unverifiable” and “unprecedented” and as seeking an “implausible” transfer of billions from a nonprofit to a former donor-turned-competitor. OpenAI’s legal team attacked Wazzan’s methodology, arguing that he ignored contributions from other founders, scientists and Microsoft, effectively reducing their input to “zero.” They also questioned why Musk’s stake in xAI was factored into damages when OpenAI is a separate entity. “By all appearances, what Wazzan has done is cherry-pick convenient factors that correspond roughly to the size of the ‘economic interest’ Musk wants to claim,” OpenAI’s filing stated.

The Valuation Question

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. The methodology attempts to convert early-stage philanthropic support into a claim on current commercial value—a legal theory with limited precedent in nonprofit law.

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.

Legal experts suggest Musk faces an uphill battle, particularly since nonprofits typically do not grant financial returns to donors. If Musk succeeds, the payout could be one of the largest in corporate history.

Strategic Positioning

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 damages estimates tied to Musk’s alleged contributions. A ruling to exclude or limit Wazzan’s testimony would narrow the financial scope of the case and potentially increase settlement pressure.

OpenAI already reportedly sent a letter Thursday to investors and others of its business partners, warning that Musk will make “deliberately outlandish, attention-grabbing claims” as his lawsuit against the company heads to trial in April. During the week, OpenAI called the lawsuit “baseless” and part of a “harassment” campaign by Musk.

Musk’s personal fortune currently hovers around $700 billion, making him by far the world’s richest person. His wealth now exceeds that of Google co-founder Larry Page, the world’s second-richest person, by approximately $500 billion, according to TechCrunch. The disparity has led OpenAI to characterize the lawsuit as competitive harassment rather than legitimate financial grievance.

IPO Shadow

The trial timing carries strategic weight for OpenAI. OpenAI is reportedly racing toward a fourth-quarter 2026 initial public offering. The AI lab has begun informal talks with Wall Street banks and hired new finance executives to prepare for the listing, according to a report from the Wall Street Journal. But while the company is currently valued at $500 billion, it has said it doesn’t expect to turn a profit until 2030.

For OpenAI, the trial introduces significant uncertainty at a pivotal moment. The company is reportedly preparing for a potential IPO as early as late 2026, and any adverse ruling could complicate that process. Public filings would expose financials already under courtroom scrutiny, according to Fortune.

Microsoft holds an investment in OpenAI’s for-profit arm valued at around $135 billion, creating complex exposure for both defendants. Microsoft, which has invested billions of dollars in OpenAI and integrates its technology across products such as Azure, Office and Windows, is also named as a defendant. Musk alleges the software giant played a role in facilitating OpenAI’s shift away from its nonprofit roots, according to CNBC reporting.

What to Watch

Judge Rogers’s ruling on expert admissibility will signal whether the case narrows to a contract dispute over specific assurances or expands into a valuation referendum on early contributions. A full exclusion of Wazzan’s testimony would cap damages at a fraction of the initial estimate, potentially accelerating settlement talks. Conversely, allowing the methodology to reach jurors transforms the trial into a high-stakes test of whether founding mission statements carry enforceable weight when AI labs scale into for-profit infrastructure.

The April trial will expose OpenAI’s internal governance documents and early communications—discovery that competitors including Musk’s xAI and Anthropic will monitor closely, according to Washington Examiner analysis. For AI companies navigating similar nonprofit-to-profit transitions, the precedent carries sector-wide risk: vague mission language and early assurances can become courtroom evidence even when founders depart years before restructuring.

Market participants should track two indicators: whether Rogers limits the damages framework, narrowing settlement range, and whether discovery disclosures leak competitive intelligence on model development or partnership terms. Either outcome reshapes the calculus for AI companies weighing governance legitimacy against capital access—a tension the trial will quantify in billion-dollar terms.