Prediction markets show Elon Musk’s chances of winning his lawsuit against OpenAI have significantly decreased, dropping from 60% to as low as 34% after his testimony. Traders on Kalshi now place his odds at 40%. The high trading volume reflects intense interest in Musk’s legal battles and other ventures like SpaceX’s potential IPO.
Elon Musk's legal battle against Sam Altman's OpenAI has seen a significant shift in sentiment on prediction markets. Initially, traders gave Musk a strong 60% chance of winning his multibillion-dollar lawsuit. However, following his testimony last week, those odds have plummeted, with current predictions placing his chances of success as low as 34% on Kalshi, a popular prediction market platform.
The lawsuit, which commenced on April 27 in federal court in Oakland, California, centers on Musk's accusation that OpenAI executives Sam Altman and Greg Brockman are attempting to 'steal a charity.' Musk, a co-founder of OpenAI, claims he conceived the idea, recruited key personnel, provided initial funding, and taught them everything he knows. His testimony, which spanned three days and concluded on April 30, involved a notable clash with OpenAI's lead counsel, William Savitt, during cross-examination.
Further complicating Musk's position in the eyes of traders, a recent filing revealed that he had texted OpenAI President Greg Brockman about a potential settlement just days before the trial began. As of Wednesday afternoon, Kalshi traders estimate Musk's probability of winning at a mere 40%.
The contract related to Musk's lawsuit has generated substantial trading volume, exceeding $890,000 in total, with nearly $48,500 traded in the past 24 hours. This case has become a focal point on prediction markets, with Kalshi hosting over 150 contracts associated with Musk and his various ventures.
Musk, alongside Altman, co-founded OpenAI in 2015. He also reportedly contributed approximately $38 million to the AI company, funds he alleges were utilized for commercial purposes, according to the lawsuit. OpenAI has publicly dismissed Musk's case as 'baseless' in a statement on social media platform X.
The Musk Trades on Prediction Markets
The extensive array of Musk-related contracts on Kalshi underscores his prominence in prediction markets. The OpenAI lawsuit contract ranks as the third most actively traded among events concerning the billionaire, trailing behind contracts related to SpaceX's initial public offering (IPO) and the timing of Starship's 12th launch. SpaceX has confidentially filed for an IPO and is reportedly aiming for a valuation of $1.75 trillion.
Other Musk-related prediction market contracts, such as those concerning his attainment of trillionaire status or a potential merger between SpaceX and Tesla, have also garnered significant attention. According to Eric Zitzewitz, a professor of economics at Dartmouth College, the high trading volume in the OpenAI suit contract may be attributed to its proximity to resolution, as traders tend to favor markets that are closer to being settled.
OpenAI currently operates as a nonprofit but holds a controlling stake in its for-profit arm, established in 2019, a year after Musk departed from the company's board. The company completed its recapitalization in October.
Disclosure: CNBC and Kalshi have a commercial relationship that includes customer acquisition and a minority investment.
