Elon Musk took the stand Thursday, accusing OpenAI of stealing a charity before he admitted that his own AI startup, xAI, had “partly” distilled OpenAI’s models to build Grok.

The Tesla Inc. (NASDAQ:TSLA) CEO is suing OpenAI for $150 billion in damages, alleging the start-up betrayed its founding nonprofit mission.

Under cross-examination from OpenAI lead counsel William Savitt on day three of the federal trial in Oakland, Musk was asked whether xAI had distilled OpenAI’s models.

“Generally AI companies distill other AI companies,” Musk replied. Pressed for a yes or no, he answered “partly.”

Distillation, the practice of using one AI model to train another, is banned by OpenAI’s terms of service. Bloomberg has separately reported that xAI engineers have leaned on Anthropic models for coding.

Musk vs Scam Altman

The animosity between the two former co-founders has been hard to miss. Musk has taken to calling Sam Altman “Scam Altman” on X, and is seeking his removal from the OpenAI board alongside a reversal of last year’s for-profit conversion.

Musk acknowledged on the stand that there was no written agreement laying out the terms of his donation to OpenAI, but argued: “At the end of the day, you can’t steal a charity.”

One of the more telling moments came when Musk told the court “we are not pursuing AGI right now,” referring to Tesla’s AI work.

Savitt then produced an exhibit of a March 4 post from Musk’s X account, in which he wrote that Tesla “will be one of the companies to make AGI and probably the first to make it in humanoid/atom-shaping form.”

Microsoft Caught In The Crossfire

Microsoft Corp. (NASDAQ:MSFT) is also a defendant in the case.

Musk’s lawyers argue that Microsoft enabled OpenAI’s alleged breach of charitable trust through its $13 billion in investments and its cloud partnership.

A jury verdict against OpenAI could force a reversal of the start-up’s for-profit conversion and may delay an IPO that could value the company at up to $1 trillion.

That would scramble Microsoft’s AI roadmap, given the bulk of its commercial AI offerings rest on OpenAI’s models.

Polymarket Traders See Musk Losing

The “Will Elon Musk win his case against Sam Altman” contract on Polymarket prices his odds at just 42% Yes, down a couple of percentage points since the case started.

Kalshi‘s similar market has Musk winning at 55%. Each market has different win conditions, Polymarket has a higher bar for Musk to clear, which explains the discrepancy.

Judge Yvonne Gonzalez Rogers blocked Musk’s lawyers from introducing expert testimony on AI extinction risk Thursday. In doing so, she took a swipe at the Tesla CEO, remarking that “plenty of people do not want to put the future of humanity in Mr. Musk’s hands.”

Altman, Microsoft CEO Satya Nadella and former OpenAI CTO Mira Murati are all slated to testify later in the trial, which is expected to run roughly four weeks.

Image: Shutterstock