Elon Musk confirmed under oath that xAI used distillation techniques on OpenAI models to train its Grok chatbot, marking the first public admission of such practices between major US AI labs.

Testifying in a California federal court Thursday, Musk acknowledged the practice when asked directly whether xAI had used distillation on OpenAI models. When pressed for clarification, he responded "Partly" and described it as standard industry behavior.

Distillation involves systematically querying AI models through their public APIs to understand their inner workings and train competing systems. The technique allows smaller companies to create capable models without the massive compute investments required for training from scratch.

Why this matters for AI competition

The admission carries particular weight given Musk's ongoing lawsuit against OpenAI, CEO Sam Altman, and co-founder Greg Brockman. He alleges they breached OpenAI's original nonprofit mission by shifting to a for-profit structure.

Frontier labs have grown increasingly concerned about distillation, particularly from Chinese companies creating open-weight models that rival US offerings at lower costs. Anthropic has accused Chinese labs of systematically mining its Claude models.

OpenAI, Anthropic, and Google reportedly launched a joint initiative through the Frontier Model Forum to combat distillation attempts. The companies are working to detect and prevent suspicious mass queries that could indicate systematic model copying.

Musk also ranked current AI leaders during his testimony, placing Anthropic first, followed by OpenAI, Google, and Chinese open-source models. He characterized xAI as "a much smaller company with just a few hundred employees" compared to its rivals.

The practice highlights the competitive dynamics in AI development, where companies balance protecting their intellectual property against the industry's collaborative traditions. While distillation may not be explicitly illegal, it likely violates most companies' terms of service.

OpenAI did not respond to requests for comment on Musk's courtroom admission.