Elon Musk Allegedly Fabricated Math to Extract $134B from OpenAI, Microsoft

Elon Musk is currently embroiled in a legal dispute concerning his financial relationship with OpenAI and Microsoft. Central to the case is Musk’s significant investment in OpenAI, which totaled $38 million, amounting to approximately 60 percent of the organization’s seed funding.

Involvement of Financial Expert

Musk’s legal team enlisted the services of Wazzan, a financial economist with extensive experience in venture capital. According to Musk’s court documents, Wazzan’s analysis was crucial in determining the compensation owed to Musk due to his investment and nonmonetary contributions to OpenAI. These contributions included recruiting key personnel and sharing his expertise in managing a startup.

Controversial Calculations

Wazzan’s calculations, however, have sparked controversy. He stated during his testimony that the methodology used was “pretty unique” and not typical for academic rigor. This raised questions about the reliability of his assessment.

Microsoft’s Allegations

Microsoft has contested Wazzan’s evaluation, claiming it was flawed. The tech giant argued that Wazzan mistakenly presumed that a portion of Microsoft’s profits should benefit OpenAI’s nonprofit arm. This assumption led to an inflated damages estimate for Musk.

Issues of Double Counting

• Wazzan allegedly double-counted the nonprofit’s value.
• Microsoft contends there was no justification for reallocating its interests.

This conflict has raised concerns about the financial integrity of the estimates presented. Both Microsoft and OpenAI’s legal filings criticize the lack of a credible basis for Wazzan’s approach.

Conclusion

The outcome of this dispute will have significant implications for all parties involved. With $134 billion at stake, the investigation into the calculations and methodology will play a crucial role in the case.