Musk v. Altman: when asked whether xAI has ever distilled tech from OpenAI, Elon Musk says the claim is “partly” true
On his third day of testimony, Elon Musk is being cross-examined by lawyers from OpenAI and Microsoft. His answers on the stand grew testy on Wednesday.
New York Times
Context & Ripple Effects
The testimony sits within Musk’s broader challenge to OpenAI’s shift in structure and relationship with Microsoft. Earlier coverage frames Musk’s case around his contention that OpenAI’s pivot departed from its original charitable purpose.
This exchange adds a separate competitive-AI issue to that dispute: whether xAI used OpenAI-derived model outputs or techniques. Later coverage indicates OpenAI contested the evidentiary basis of Musk’s wider claims, while Nadella testified Musk had not raised concerns with him directly.
First-order effects
Musk’s partial acknowledgment puts xAI’s model-development practices under sharper scrutiny in the OpenAI/Microsoft cross-examination.
OpenAI and Microsoft gain testimony they can use to challenge Musk’s position and to press for clarity on what “distilled” means in xAI’s development process.
Second-order effects
The dispute raises the value of documented model provenance, access controls, and internal records for frontier-model developers facing rival litigation.
Competitors may be pushed to distinguish permitted benchmarking or output use from conduct that can be characterized as distillation, especially when commercial rivals have access to one another’s services.
Third-order effects
If such claims become a recurring feature of frontier-AI competition, model-output use and training provenance could become a more central litigation and governance boundary than public claims of model performance alone.
The case also illustrates how governance disputes among AI labs can expand into disputes over technical practice, making corporate structure, partnerships, and model-development controls increasingly interconnected.
The trend: Frontier-AI rivalry is moving toward greater scrutiny of model provenance and the legal boundaries around learning from competing systems.
I think OpenAI did basically betray its commitments to its early investors but it's so absurd to have Musk being the one suing when he 1) didn't seem to care until it affected him personally and 2) is now running a fully for-profit competitor.
LIVE TRIAL UPDATE: OpenAI's counsel asked Musk whether xAI has ever “distilled” technology from OpenAI. Musk: “Generally AI companies distill other AI companies.” “Is that a yes?” Savitt asked. Musk: “Partly.”
it is quite significant that Musk admitted on the stand that xAI is distilling OpenAI models to train xAI, and that it is using OpenAI's technology to build xAI!
Musk also told a Neuralink exec they could hire directly from OpenAI, and pitch people who work there to come to Neuralink. On the witness stand, Musk tried to argue it would be illegal for his companies not to hire people from OpenAI. Musk also said Andrej wanted to leave [image…
New: Musk was cross-examined by OpenAI's lawyers in federal court today. They pressed him on all the ways he squeezed OpenAI over a power struggle in 2017, including by hiring away talent and cutting off funding. Here's an email Musk sent about hiring Andrej Karpathy. [image]
Musk had also been sending $5 million quarterly payments to OpenAI as part of a larger $1 billion funding commitment he made at the org's launch. Around this time, he instructed the head of his family office, Jared Birchall, to stop paying them. Musk said this was because he [ima…
The thing about suing someone is they can drag up old emails you sent and read them out loud in front of everybody which tbh sounds like a GREAT reason never to sue anybody ever at all. from @mzeff.bsky.social