<div id="readability-page-1"><div> OpenAI and Anthropic have been on the warpath lately against third-party efforts to train new AI models by prompting their publicly-accessible chatbots and APIs, a process known as “distillation.” That conversation has focused on Chinese firms using distillation to create open-weight models that are nearly as capable as U.S. offerings, but available at a much lower cost. However, tech workers have widely assumed that American labs use these techniques on each other to avoid falling behind competitors. Now, we know it’s true in at least one case: on the stand in a California federal court on Thursday, Elon Musk was asked if xAI has used distillation techniques on OpenAI models to train Grok, and he asserted it was a general practice among AI companies. Asked if that meant “yes,” he said, “Partly.” Musk is in the process of suing OpenAI, CEO Sam Altman, and Greg Brockman, alleging they breached the original nonprofit mission for OpenAI by shifting the entity to a for-profit structure. That trial began this week, featuring testimony from the tech leader. Musk’s admission is notable because distillation threatens AI giants by undermining the advantage they’ve built by investing in compute infrastructure. This allows other software makers to create models that are nearly as capable on the cheap. There’s no small amount of irony here, given the bending and alleged breaking of copyright rules by frontier labs in their search for sufficient data to train their models. It’s no surprise that Musk’s xAI, which started in 2023, years after OpenAI, would try to learn from the then-leader in the field. It’s not clear that distillation is explicitly illegal, but rather may violate the terms of service companies set for the user of their products. OpenAI, Anthropic, and Google have reportedly launched an initiative through the Frontier Model Forum to share information about how to combat distillation attempts from China. These typically involve systematic querying of models to understand their inner workings. To stop the efforts, frontier labs are working to prevent users from making suspicious mass queries. OpenAI did not respond to a request for comment on Musk’s admission at press time. Later in his testimony, Musk was asked about a claim he made last summer that xAI would soon be far beyond any company besides Google. In response, he ranked the world’s leading AI providers, saying Anthropic held the top spot, followed by OpenAI, Google, and Chinese open source models. He characterized xAI as a much smaller company with just a few hundred employees. </div></div>

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Elon Musk testified in a California federal court that his company, xAI, has used distillation techniques on OpenAI models to train its AI, Grok. This admission comes amid Musk's lawsuit against OpenAI, alleging a breach of its original nonprofit mission. Distillation, a method of training AI models using publicly accessible chatbots, poses a threat to established AI companies by allowing cheaper alternatives to emerge. Musk ranked leading AI providers, placing xAI as a smaller player in the field. OpenAI, Anthropic, and Google are reportedly collaborating to combat distillation efforts from competitors.

- OpenAI and Anthropic are actively opposing the use of "distillation" techniques by third parties to create competitive AI models, particularly from Chinese firms.  
- Elon Musk testified in a California federal court that xAI has engaged in distillation practices similar to those of other companies, which he claims is common within the industry, amid his lawsuit against OpenAI over its for-profit shift.  
- The ongoing legal battle highlights concerns about distillation undermining the competitive edge of major AI firms, prompting initiatives to combat such practices.

Elon Musk testifies that xAI trained Grok on OpenAI models