The judge overseeing Elon Musk's lawsuit against OpenAI, Yvonne Gonzalez Rogers, has previously demonstrated her style in other major tech cases, such as Epic Games versus Apple: she does not hesitate to challenge arguments or witness testimonies in court. This was evident during last Friday's hearing, which centered on a key question: whether the economist hired by Musk's legal team could submit his damage calculation report as evidence.
The economist, C. Paul Wazzan, calculated that OpenAI could owe Musk up to $109 billion. This figure was derived by converting Musk's early donations to OpenAI when it was a non-profit organization, based on OpenAI's $500 billion valuation last year. Judge Rogers expressed deep skepticism about these calculations, stating plainly, "A jury will understand these numbers are plucked from the air." She described the report as having weak persuasiveness. When Musk's lawyer mentioned Wazzan's estimate that Musk contributed 50% to 75% to OpenAI's success, Rogers interjected, "Or 2%."
Despite her reservations, Judge Rogers indicated she would allow the jury to hear Wazzan's testimony, reasoning that his methodology aligns with the valuation logic common in Silicon Valley startups. "In Silicon Valley, there's a certain way things are done. You know, startup financing is completely different from selecting stocks for a mutual fund—it's a distinct model," she said. "And the Silicon Valley approach is consistent with his perspective."
Rogers' stance is crucial because she suggested that any jury decision regarding the profits awarded to Musk might be merely "advisory"—meaning the final ruling rests with her. The trial is scheduled to begin on April 27. Given the star-studded list of potential witnesses, including Musk himself, the proceedings are expected to be highly contentious. Last Friday's hearing offered a preview of the intense debates likely to unfold.
At least OpenAI now understands the situation it faces. Microsoft also objected to Wazzan's report, but no ruling was issued—under the same calculation method, Wazzan estimated Microsoft could owe up to $25 billion. This substantial liability remains pending until the judge issues a written decision.
Another critical issue remains unresolved: if Musk wins the case, which OpenAI entity should pay? The non-profit foundation, which holds about one-third of the company's equity as a legacy of OpenAI's charitable origins, is involved. OpenAI's lawyers argued in court filings that Wazzan is seeking damages from the non-profit entity, which could deplete a significant portion of the foundation's assets—a surprising twist, given Musk's public stance as a defender of the non-profit model. However, one of Musk's lawyers stated that the for-profit entity should be liable, and OpenAI cannot choose which entity pays.
The trial will proceed in two phases. Musk's simultaneous antitrust lawsuit against OpenAI has been postponed to a later stage. Judge Rogers remarked candidly, "Frankly, I'm not sure how far the second phase will go. This industry is highly competitive, and the antitrust claims seem tenuous."
Meanwhile, if you are confused about who is currently in charge at Musk's xAI, that is understandable. Last week and over the weekend, two xAI co-founders departed, while several new members were recruited from competitors like Cursor and Thinking Machines Lab. As Musk posted on X last Thursday, "xAI was structured incorrectly from the beginning and is now being completely rebuilt from the ground up."
The new hires indicate one clear priority: Musk is eager for xAI's coding tools to catch up with rivals like Anthropic. Key recent additions include Andrew Milich and Jason Ginsberg, previously engineering and product leads at Cursor, respectively. Over the weekend, founders of at least two small startups, Arman Gotumukkala and William Zeng, also announced on X that they joined xAI to work on code-related projects.
During a recent conference, Musk openly admitted that xAI is "currently behind in coding capabilities" but pledged to catch up and surpass competitors by mid-year. Another significant hire is Devendra Chaplot, a founding engineer at Mira Murati's Thinking Machines Lab, who will focus on AI model training, likely contributing to the repeatedly delayed Grok 5 model. According to reports, Chaplot, Milich, and Ginsberg will all report directly to Musk.
Publicly declaring that a company was "structured incorrectly" and overhauling its core team is a major event for any AI lab, especially one valued at $250 billion—the figure assigned to xAI when it merged with SpaceX last month. xAI faces additional urgency: its financials may need to be disclosed when SpaceX files for an IPO later this year, and its enterprise business is much smaller than those of OpenAI, Anthropic, and Google. This means the new team has only months, not years, to achieve Musk's goal of rebuilding the company from the ground up.
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