Elon Musk Admits xAI Used OpenAI’s Models to Train Grok

Elon Musk sat in a federal courtroom in California on Thursday and casually admitted something that makes his ongoing legal crusade against OpenAI look a little awkward: his own AI startup, xAI, used OpenAI’s models to improve Grok.

The testimony centered on model distillation. If you’re not deep in the ML weeds, here’s the short version: you take a big, capable model (the “teacher”) and use its outputs to train a smaller, cheaper model (the “student”). It’s standard practice inside companies—Google does it, Meta does it, OpenAI almost certainly does it internally. But it’s also the kind of thing smaller labs reach for when they want their model to punch above its weight by mimicking a competitor’s performance.

When the prosecutor asked Musk if he knew what model distillation was, he said yes. Then came the follow-up: had xAI used it with OpenAI’s models? Yes again.

This is the same Elon Musk who has spent months accusing OpenAI of abandoning its nonprofit roots, hoarding technology, and acting anticompetitively. The same guy who sued OpenAI alleging it was violating its original mission. And now he’s on record saying his own company used OpenAI’s work to train its product. The irony is thick enough to spread on toast.

Now, distillation isn’t illegal, and it’s not even particularly controversial when done within reasonable bounds. OpenAI’s terms of service do restrict using their outputs to build competing models, but enforcement is spotty and the industry largely looks the other way. What makes this interesting is the framing: Musk has positioned himself as the open-source champion fighting the closed, corporate AI overlords. Turns out he was just another customer.

I’ve seen this pattern before. Companies that posture as disruptors often have the messiest backstage. The real question here isn’t whether xAI violated any rules—it’s whether Musk’s lawsuit has any moral standing left. If you’re using the very thing you’re suing over, you’re not a crusader; you’re just a competitor with a better PR team.

The courtroom drama aside, this case highlights a tension that isn’t going away. Model distillation is essential for making AI accessible and affordable. But it also creates a gray zone where everyone borrows from everyone else, then sues when someone borrows from them. Musk’s testimony just made that hypocrisy impossible to ignore.