OpenAI and Anthropic have been on the warpath lately against third-party efforts to train new AI models by prompting their publicly-accessible chatbots and APIs, a process known as “distillation.” That conversation has focused on Chinese firms using distillation to create open-weight models that are nearly as capable as U.S. offerings, but available at a much lower cost. However, tech workers have widely assumed that American labs use these techniques on each other to avoid falling behind competitors. Now, we know it’s true in at least one case: on the stand in a California federal court on Thursday, Elon Musk was asked if xAI has used distillation techniques on OpenAI models to train Grok, and he asserted it was a general practice among AI companies. Asked if that meant “yes,” he said, “Partly.” Musk is in the process of suing OpenAI , CEO Sam Altman, and Greg Brockman, alleging they breached the original nonprofit mission for OpenAI by shifting the entity to a for-profit structure.…