Elon Musk is seeking as much as $134 billion in damages from OpenAI and Microsoft, arguing that both companies benefited enormously from his early backing of the artificial intelligence startup and that those gains were improperly obtained after OpenAI abandoned its original mission.

The bid is fast becoming one of the most consequential legal battles in the global AI race, not only because of the staggering sums involved, but because of what it could mean for how artificial intelligence is funded, governed, and commercialized.

At its core, the lawsuit is an attempt by Musk to retroactively redefine his role in OpenAI’s origin story — from philanthropist and early supporter to aggrieved architect whose contributions, he argues, laid the groundwork for extraordinary private gains that he was unfairly cut out of.

In the filing submitted on Friday, Musk contends that OpenAI’s transformation from a nonprofit research lab into a for-profit enterprise tightly aligned with Microsoft fundamentally altered the bargain under which he provided early funding, credibility, and strategic support. He argues that those changes enabled OpenAI to generate between $65.5 billion and $109.4 billion in value, while Microsoft extracted a further $13.3 billion to $25.1 billion through its exclusive cloud, licensing, and distribution arrangements.

The numbers themselves are striking, but so is the legal theory underpinning them. Musk is not claiming conventional investor damages. Instead, he is seeking “disgorgement” — the return of what he describes as “wrongful gains” — a remedy more commonly associated with fraud or breach of fiduciary duty than with disputes between founders and donors. His filing explicitly likens his role to that of an early startup investor who took existential risk and therefore deserves outsized returns once the venture succeeds.

OpenAI and Microsoft reject that framing outright. They argue that Musk was never promised equity-like returns, that OpenAI’s restructuring was necessary to raise capital at the scale required to compete in frontier AI, and that Musk’s claims amount to an unprecedented attempt to siphon value out of an organization he voluntarily left seven years ago.

The companies’ counter-filing attacks the credibility of Musk’s damages model, warning that it invites jurors to speculate about hypothetical alternate histories of OpenAI — scenarios in which Musk remained involved, the nonprofit model remained intact, and Microsoft’s role was either reduced or nonexistent. They argue that such speculation is not only unverifiable but fundamentally misleading.

Beyond the courtroom, the case exposes deeper fault lines in the AI ecosystem.

First is the unresolved tension between public-interest AI and commercial reality. OpenAI was founded on the idea that artificial general intelligence should benefit humanity broadly, not concentrate power or wealth. Musk’s lawsuit leans heavily on that original mission, portraying the Microsoft partnership and profit-seeking structure as a departure so severe that it invalidates earlier commitments. OpenAI counters that without commercialization, the organization would have been unable to fund the computing power, talent, and infrastructure needed to remain competitive.

Second is the question of control. Musk left OpenAI in 2018 after disagreements over leadership and direction. Since then, the company has become one of the most influential forces in technology, while Musk has launched xAI to compete directly with it. That competitive overlap looms over the case. OpenAI and Microsoft have already characterized Musk as a “donor-turned-competitor,” suggesting his legal action is as much about weakening a rival as it is about righting alleged wrongs.

Third is the precedent the case could set. If a jury accepts Musk’s argument, it could unsettle how nonprofits, research labs, and mission-driven organizations attract early funding. Future donors and founders may demand clearer exit rights, financial upside, or contractual safeguards, potentially accelerating the shift away from nonprofit structures in cutting-edge technology fields.

The stakes are heightened by the remedies Musk is seeking. In addition to massive financial damages, his filing leaves open the possibility of punitive penalties and injunctive relief. Even a narrowly tailored injunction could disrupt OpenAI’s governance or constrain aspects of its partnership with Microsoft — a relationship that underpins products across cloud computing, enterprise software, and consumer AI services.

The case carries reputational as well as financial risk for Microsoft. While the company insists it did not aid any breach of OpenAI’s mission, a prolonged trial will inevitably scrutinize how much influence it exerts over OpenAI’s strategy and whether its commercial interests shaped decisions that were once framed as altruistic.

The dispute is gradually evolving into a referendum on the economics of AI itself: who bears the early risks, who captures the rewards, and whether lofty founding ideals can survive once AI systems become engines of immense profit and power. Whatever the jury decides, the outcome is likely to ripple far beyond Musk, OpenAI, and Microsoft, shaping how the next generation of AI ventures are built, funded, and controlled.

The European Union is moving closer to a binding crackdown on Chinese-made technology in sensitive sectors, signaling a sharp escalation in its effort to reduce strategic dependence on Beijing amid rising geopolitical tensions and intensifying pressure from Washington.

According to the Financial Times, Brussels is preparing a proposal that would force EU member states to phase out equipment from companies deemed “high-risk vendors,” including Huawei and ZTE, from critical infrastructure such as telecommunications networks and solar energy systems. The plan would effectively end the bloc’s current voluntary approach and replace it with a mandatory regime under its broader cybersecurity framework.

If adopted, the shift would mark one of the EU’s most consequential security-driven technology interventions to date, with far-reaching implications for telecom operators, energy providers, supply chains, and EU–China relations.

From voluntary guidelines to binding rules

Since 2020, the EU has relied on a non-binding “toolbox” that encourages member states to assess and mitigate risks from foreign vendors in 5G and other critical networks. While some countries, including Sweden and Denmark, moved quickly to restrict Chinese suppliers, others took a far more cautious stance.

Large economies such as Germany and Spain resisted outright bans, citing the cost of replacing existing equipment, potential disruptions to network stability, and the lack of sufficient alternatives at scale. As a result, Huawei equipment remains deeply embedded in parts of Europe’s telecom infrastructure, particularly in legacy 4G networks that underpin 5G roll-outs.

EU officials now appear convinced that the voluntary model has reached its limits. The proposed cybersecurity initiative, expected to be unveiled on Tuesday, would compel governments to act, closing loopholes that have allowed national discretion to override bloc-wide security concerns.

Notably, the scope of the proposal goes beyond telecommunications. By extending restrictions to solar energy systems, the EU is signaling that it now views energy infrastructure through the same national security lens as digital networks.

China dominates large segments of the global solar supply chain, from polysilicon to finished panels, and European policymakers have grown increasingly uneasy about that reliance as renewable energy becomes central to economic and industrial strategy. For Brussels, the issue is no longer just cybersecurity, but long-term resilience, control over critical inputs, and protection against coercive leverage.

The timelines for phasing out Chinese equipment would vary depending on the sector, perceived risk, and the availability of alternative suppliers. Officials cited in the report said cost considerations would also be factored in, suggesting a gradual transition rather than an abrupt dismantling of existing infrastructure.

Industry resistance and economic trade-offs

Telecom operators are likely to push back. Industry groups have repeatedly warned that forced equipment replacement could cost billions of euros, slow network upgrades, and weaken Europe’s competitiveness in 5G and future 6G technologies. Many operators are already grappling with heavy capital expenditure, weak revenue growth, and rising energy costs.

Replacing Chinese equipment is not simply a matter of switching vendors. Networks are deeply integrated systems, and removing one supplier often requires broader redesigns. European alternatives such as Ericsson and Nokia stand to benefit commercially, but scaling up quickly enough to meet demand remains a challenge.

There are also concerns that higher infrastructure costs could ultimately be passed on to consumers or delay digital inclusion goals, particularly in rural and underserved regions.

Alignment with the United States

The EU’s move brings it closer to the U.S. position, which has taken a far more aggressive stance. Washington banned approvals of new telecommunications equipment from Huawei and ZTE in 2022 and has consistently urged allies to exclude Chinese vendors, framing the issue as a matter of national security and intelligence protection.

While European officials have often bristled at what they see as American pressure, the convergence of policy suggests a growing alignment driven by shared threat assessments rather than diplomacy alone.

Strained EU–China relations

For Beijing, the proposal is likely to be viewed as another sign that Europe is hardening its stance. China has previously accused the EU of politicizing trade and discriminating against Chinese companies, warning that such measures could damage economic ties.

Huawei, once a symbol of deep technological cooperation between China and Europe, has already felt the chill. The company has been reassessing the future of a newly completed manufacturing plant in eastern France, amid regulatory uncertainty, slow 5G deployment, and shrinking market access across the continent.

Taken together, the proposal reflects a broader recalibration of EU policy toward “economic security.” Brussels has increasingly emphasized de-risking rather than full decoupling, but mandatory exclusions from critical infrastructure represent a more forceful use of regulatory power.

The challenge now lies in execution. Member states must balance security priorities with economic realities, manage industry fallout, and ensure that Europe does not simply swap one dependency for another.