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.
Topics
AI, AI training, distillation, Elon Musk, Grok, OpenAIWhen you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.
Tim Fernholz
Senior Reporter
Tim Fernholz is a journalist who writes about technology, finance and public policy. He has closely covered the rise of the private space industry and is the author of Rocket Billionaires: Elon Musk, Jeff Bezos and the New Space Race. Formerly, he was a senior reporter at Quartz, the global business news site, for more than a decade, and began his career as a political reporter in Washington, D.C. You can contact or verify outreach from Tim by emailing tim.fernholz@techcrunch.com or via an encrypted message to tim_fernholz.21 on Signal. View Bio
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