Apple will pay up to $95 to some US iPhone buyers to settle a lawsuit filed last year. Plaintiffs alleged that Apple’s advertising of Apple Intelligence misled consumers. This is another case of tech companies facing legal challenges over AI marketing claims.

Source: BBC Technology

April 30, 2026 | Sources: TechCrunch, BBC News

Courtroom Admission of Model Distillation

During Thursday’s testimony in a California federal court, Elon Musk was asked whether xAI had used distillation techniques on OpenAI’s publicly-accessible models to train Grok. Musk partially admitted to the practice, characterizing it as common among AI companies.

When pressed on whether that meant “yes,” Musk replied: “Partly.”

What Is Model Distillation?

Model distillation refers to the technique of systematically querying publicly-available AI chatbots and APIs, extracting their outputs, and using them to train new models. This enables other software companies to create AI systems nearly as capable as frontier models at a fraction of the cost.

Until now, the conversation around distillation had focused primarily on Chinese firms using the technique to create open-weight models that rival U.S. offerings. However, it has been widely assumed in the tech industry that American labs also employ these techniques against each other to avoid falling behind.

Now, for the first time, this has been confirmed at the highest level.

The Irony

Musk’s admission carries particular irony given that he is the one suing OpenAI, CEO Sam Altman, and Greg Brockman, alleging they breached the original nonprofit mission of OpenAI by converting it to a for-profit entity.

Distillation threatens the competitive advantage that AI giants have built through massive investments in computing infrastructure. This admission takes on added significance considering the reported bending and alleged breaking of copyright rules by frontier labs in their own quest for training data.

xAI’s Industry Positioning

Later in his testimony, Musk was questioned about a claim he made last summer that xAI would soon be far ahead of every company except Google. In response, he reassessed the landscape of leading AI providers, ranking Anthropic at the top, followed by OpenAI, Google, and Chinese open-source models. He characterized xAI as a much smaller company with only a few hundred employees.

Industry Impact

OpenAI, Anthropic, and Google have reportedly launched an initiative through the Frontier Model Forum to share information about combating distillation attempts, particularly from China. To counter these 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.

Source: TechCrunch, BBC News