Musk Admits xAI Distills OpenAI Models in Oakland Trial
SkimNews Take
The courtroom's focus on technical and financial evidence, rather than direct testimony on original intent, suggests the legal battle may pivot on interpreting founding documents through a modern lens of AI's commercial potential.
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- Elon Musk testified in a crisp black suit in Oakland federal court, arguing that OpenAI breached its charitable trust by pivoting to a for-profit after he helped fund it around 2015; his primary remedy is unwinding OpenAI's October 2025 restructuring deal with the California and Delaware attorneys general.
- On day four of cross-examination, Musk admitted xAI distills OpenAI's models to train its own, calling it "standard practice" across AI labs — a revelation that sent reporters in the gallery typing furiously.
- The judge pushed back sharply when a Musk lawyer warned "we could all die as a result of AI," pointing out that Musk himself runs a competing AI company, and later told the court the trial is "not about whether or not artificial intelligence has damaged humanity."
- Musk and Mark Zuckerberg were revealed via text messages to be coordinating a bid to purchase all assets of OpenAI's nonprofit and to block its restructuring — undermining Musk's claim that he was blindsided by OpenAI's for-profit shift.
- Greg Brockman is expected to testify next week alongside Ilya Sutskever, Mira Murati, Satya Nadella, and UC Berkeley's Stuart Russell on AI safety; the trial is set to run roughly three weeks before nine jurors deliver an advisory verdict to the judge.
- Musk's suit targets OpenAI just as the company reportedly plans an IPO this year, meaning even a partial win could derail or restructure that offering.
Why it matters: Musk is asking a federal judge to unwind OpenAI's October 2025 restructuring — negotiated with the California and Delaware AGs — just as OpenAI reportedly prepares an IPO this year, so any partial win could force structural changes to the offering. The xAI distillation admission and the Musk-Zuckerberg texts surfaced in court directly undercut Musk's central claim that he didn't know about OpenAI's for-profit pivot until 2022.
