Elon Musk odds low to win OpenAI suit

In the eyes of prediction market investors, Elon Musk is hurting himself in the lawsuit against OpenAI.

The multibillion-dollar lawsuit against OpenAI went to trial April 27 in federal court in Oakland, California. The day after the hearing began, Kalshi traders were saying Musk had a 60% chance of winning the case. On May 2, two days after Musk completed his testimony, those rates dropped to just under 34%.

Eric Zitzewitz, an economics professor at Dartmouth College, said Musk’s odds of winning are “not very high” but suggested that “the market responds to how headlines and news coverage cover the case.”

Musk’s testimony spanned three days and ended on April 30. Billionaire OpenAI CEO Sam Altman and company president Greg Brockman, “Steal a charity.”

“I came up with the idea and the name, hired key people, taught them everything I knew, and secured initial financing,” he said.

Musk clashed with OpenAI general counsel William Savitt of Wachtell Lipton during cross-examination, claiming that he lied and asked deceptive questions “designed to deceive” Musk.

Also hurting his chances with investors could be a filing this week stating that Musk texted Brockman about a possible deal just days before the hearing.

Investors say Musk has a 40% chance of winning against OpenAI as of Wednesday afternoon.

The contract related to Musk’s lawsuit, filed in January, has a trading volume of over $890,000, with approximately $48,500 traded in the last 24 hours.

Musk and Altman founded OpenAI in 2015. According to the lawsuit, Musk also donated approximately $38 million to the AI ​​company and claimed that the amount was used for commercial purposes.

In a post social media platformOpenAI said Musk’s lawsuit was “baseless.”

Kalshi has more than 150 active Musk-related engagements on the site. The billionaire’s total trading activity in his lawsuit against OpenAI is the third highest among all active events related to him. This has been surpassed by a contract worth over $4.2 million regarding when SpaceX will officially announce its initial public offering. SpaceX is a hot topic in the prediction markets; Another contract estimates when Starship will make its 12th launch, with the company changing hands for more than $1.5 million.

SpaceX It has secretly filed for an initial public offering with the Securities and Exchange Commission but has yet to formally announce its offering. The rocket maker plans to launch around June and could aim for a valuation of $1.75 trillion. Bloomberg It was first reported by citing people familiar with the matter.

Other Musk-related events, such as when the billionaire will reach trillionaire status or when SpaceX and Tesla might merge, have also attracted a lot of attention.

Zitzewitz said one reason why the contract focused on Musk’s OpenAI team had high trading volume may depend on the timeline of the event.

“People like to trade things that are close to being solved,” Zitzewitz said. “I’m more likely to trade in a market where there are a lot of people.”

OpenAI remains a nonprofit but acquired a controlling stake in its for-profit business after completing its recapitalization in October. He founded his nonprofit subsidiary in 2019, about a year after Musk left the board.

Disclosure: CNBC and Kalshi have a business relationship that includes customer acquisition and minority investment.