Musk in Court: 'Everyone Does It'

Opening

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Yesterday (April 30), at a federal courtroom in Oakland, California, Elon Musk admitted to something: that xAI had used model distillation¹ to build Grok, drawing on OpenAI’s models. In his own words, it was “partly” — and using another company’s AI to validate your own AI is “standard practice.” The weight of that single line goes far beyond a courtroom remark. For the past year, the US administration, OpenAI, and Anthropic have accused China’s DeepSeek of “industrial-scale IP theft,” even deploying diplomatic pressure over it — and now the CEO of America’s flagship AI company has voluntarily admitted, in his own country’s courtroom, to doing exactly that.

Let me give you the conclusion up front. This confession marks the first time an open secret — that everyone in the AI industry has been building on each other’s models — has been entered into the official record. And it exposes the ethical asymmetry at the heart of the OpenAI–DeepSeek dispute. Let’s walk through it alongside the 4 days of trial testimony.

4 Days in Court: What Happened

This trial is the merits hearing in the lawsuit Musk filed against OpenAI in 2024. The central question is “whether OpenAI violated its charitable trust obligations by starting as a nonprofit and then creating a for-profit entity.” Musk is seeking to convert OpenAI back into a nonprofit, remove Sam Altman and Greg Brockman from the board, and win substantial damages.

April 27 (Mon) Jury selection: 9 jurors were selected. Interestingly, many prospective jurors expressed antipathy toward Musk’s political activities. It’s a signal that perceptions of the person — not just the case itself — are already shaping one axis of this trial.

April 28 (Tue) First testimony: Musk testified that he made OpenAI a nonprofit in order to “check Google’s dominance in AI” at the time. He stressed that he wouldn’t have funded it had it been structured as a for-profit. This was the stage where he established his legitimacy as an OpenAI co-founder.

April 29 (Wed) The most heated day: Musk expressed his anger, saying that funding OpenAI “was a fool’s errand” and that “I put in $38 million and ended up building an $800 billion company” for someone else. He said his trust in OpenAI shifted through 3 stages:

“A period of enthusiastic support, a period of mild doubt, and a period when I felt looting was happening at the nonprofit.” He criticized the shift to for-profit status while still enjoying the “halo effect” of nonprofit status as wanting to “have your cake and eat it too.” It was also revealed that right after hearing about Microsoft’s $10 billion investment in OpenAI in 2022, he texted Altman that it was a “bait and switch.” Cross-examination that day by OpenAI’s attorney William Savitt was fierce. Both sides raised their voices, and Musk even accused Savitt of “lying.”

April 30 (Thu) Musk’s testimony concludes, and the confession: Savitt relentlessly pressed Musk on his self-contradictions. Musk’s other companies — Tesla, SpaceX, Neuralink, X — are all for-profit entities with no profit cap, yet Musk answered that they were all “socially beneficial.” xAI itself started as a Public Benefit Corporation in March 2023, then stripped out its social and environmental responsibility clauses in 2024 to convert into an ordinary for-profit c-corp, merged with X in 2025, and this year was absorbed into SpaceX. This trajectory directly collides with Musk’s core argument that “OpenAI’s shift from nonprofit to for-profit was unjust.” And right at the end of this pursuit of self-contradiction, Savitt asked whether “xAI had used OpenAI’s models to develop or test its own models.” Musk’s answer was “partly,” and “standard practice.” Right after that statement, he stepped down from the witness stand, and the next witness called was Jared Birchall, who runs Musk’s family office (Excession LLC).