Elon Musk’s testimony in the OpenAI lawsuit highlighted debates over AI model distillation, industry competition, and Open Ai’s pivot from its non profit mission

Third-party efforts to train new AI models by prompting publicly accessible chatbots and APIs is a process known as distillation. Chinese firms are often accused of using distillation to create models that are similarly capable to US offerings at a fraction of the cost. With toll of rising prices for computation power and competition in the sector, American labs have also begun using these techniques, as evidenced by Elon Musk’s testimony during a legal case involving Sam Altman.

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Musk is currently testifying against OpenAI CEO Sam Altman and Greg Brockman, alleging that they breached the company’s original non-profit mission in favour of a for-profit structure. The trial began this week, with Musk’s testimony concluding on Thursday.

On Thursday the California court questioned Elon Musk on whether xAI had used distillation techniques on OpenAI models to train Grok, to which he responded that it was a general practice among AI companies. When asked if that meant “yes,” he replied, “partly.”

Savitt jasked Musk if his artificial intelligence company, xAI, had ever “distilled” technology from OpenAI. Distillation is way of using one A.I. technology to create another, and it is not allowed by OpenAI’s terms of service.

“Generally A.I. companies distill other A.I. companies,” Musk answered.

“Is that a ‘yes’?” Savitt asked. Musk answered, “Partly.”

The admission is notable, as distillation threatens AI giants by undermining the advantage these companies have built through heavy investment in compute infrastructure.

To curb distillation, OpenAI, Anthropic, and Google have launched initiatives through the Frontier Model Forum to share information on detecting and countering such practices. These systems involve systematically querying models to understand their inner workings. To prevent misuse, frontier labs are also working to block suspicious large-scale querying patterns.

Highlights of Musk Testimony with William Savitt Open AI Lead Council

William Savitt, OpenAI’s lead counsel, asked Musk if he was aware that OpenAI’s non-profit entity still existed and retained control over the for-profit company it created. Musk was also questioned by Microsoft’s lead counsel, Russell Cohen, who highlighted Musk’s awareness of the relationship between OpenAI and Microsoft.

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Steven Molo later questioned Musk on why he did not file a lawsuit years earlier. Musk responded that he believed OpenAI would remain a “pure-play 501(c)(3),” referring to its non-profit status, which is why he did not act sooner.

Musk’s testimony ended on a lighter note, as Savitt continued questioning him. Musk remarked that Savitt was asking leading questions, prompting Judge Gonzalez Rogers to intervene: “He can lead. That’s not how it works. Let’s remind everyone in the courtroom that you’re not a lawyer.”

Musk, who has repeatedly described himself during the proceedings as a “highly literal person,” had the final word: “I am not a lawyer. Well, technically I did take Law 101 in school.” The courtroom reportedly laughed.

As of now, Musk has been dismissed from the stand but may be recalled during the remaining weeks of the trial, with inputs from a New York Times report.

First Published:
May 01, 2026, 00:58 IST

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