Prediction Markets Lower Odds of Musk Win in OpenAI Lawsuit

Traders on a prediction market have cut the odds of Elon Musk winning his lawsuit against OpenAI to 40 percent as of early May, down from 60 percent when the trial opened on April 27 in federal court in Oakland, California. The multibillion-dollar case pits Musk against the artificial intelligence company he co-founded in 2015.

Musk donated roughly $38 million to the organization and has accused its leaders of converting it from a nonprofit into a commercial enterprise now valued at more than $800 billion. Musk completed three days of testimony on April 30. During his appearance he stated that he came up with the idea for the organization, recruited key people, taught them what he knew and provided all the initial funding.

He accused the company's leaders of trying to steal a charity. Cross-examination featured clashes with opposing counsel over questions Musk described as designed to trick him. A filing disclosed that Musk had texted one of the company's leaders about a possible settlement days before the trial began.

That disclosure, along with coverage of the testimony, contributed to the decline in the prediction market odds, according to an economics professor who follows the platform. The contract tied to the lawsuit has seen more than $890,000 in total trading volume.

Court evidence presented this week showed that in late 2017, months before he left the organization's board in February 2018, Musk sought to recruit the company's then-leader to head an artificial intelligence effort inside Tesla. Messages and draft documents described plans for a world-class AI lab that would rival efforts at Google, DeepMind and Facebook.

One draft FAQ prepared for an event at a major AI conference listed the company's leader alongside Musk with question marks, suggesting he could moderate a session as a way to secure commitment. A former adviser who served as a conduit between Musk and the company's leader testified about the exchanges.

She confirmed that the recruitment effort never materialized and that the planned AI lab and related event did not occur. Lawyers for the company argued the evidence demonstrated Musk's attempt to absorb the organization into Tesla, describing his later lawsuit as motivated by sour grapes after failing to gain control in 2017.

Additional testimony and depositions raised questions about the company's leader's past conduct. Video depositions from two former officials were shown to the jury. The company has maintained that its evolution from nonprofit to a structure with a for-profit subsidiary, completed in stages beginning in 2019, followed its stated mission.

It completed a recapitalization last October that gave it a controlling stake in the commercial arm while preserving nonprofit oversight.

The lawsuit is one of several Musk-related events attracting heavy trading volume on the prediction platform. Contracts tied to SpaceX matters have generated even larger sums, including more than $4.2 million on the timing of an initial public offering announcement and $1.5 million on the schedule for the company's Starship launch program.

SpaceX has confidentially filed for an IPO but has not formally announced it. Reports have pointed to a potential debut around June with a valuation as high as $1.75 trillion. Traders appear drawn to events with near-term resolution, one observer noted.

The OpenAI case is expected to produce a verdict in the coming weeks or months, sustaining interest. Musk has since launched a separate for-profit artificial intelligence company to compete in the sector.

“There was documentary evidence that, at several points, Mr. Musk had contemplated seeking to join Sam Altman to the board and offered that option.”