NYT's Mike Isaac reporting live from the Musk vs. OpenAI trial: distillation claims, jury dynamics, and what's next

Musk vs. OpenAI: Inside the Oakland Courthouse

Mike Isaac, the New York Times technology reporter covering the Musk vs. OpenAI trial, has been lining up outside the Oakland federal courthouse at 5 a.m. most days this week to secure one of 30 unreserved public seats. There are 20 reserved press seats — one per outlet — so Isaac and his NYT colleague Cade Metz have been trading off on the front-row access.

Elon on the stand

Musk's courtroom strategy is playing two notes at once. In direct testimony, he leans into the world-changing entrepreneur persona — existential risk, humanity's future, his record at Tesla and SpaceX. Under cross-examination from OpenAI's lead counsel Bill Sabbat, that posture collapses into open antagonism. Musk has complained that Sabbat's questions are too complicated or not yes-or-no, which is a fair grievance in the abstract but a predictable feature of any cross-examination. Fans in the public gallery audibly cheer when Musk gets sassy with opposing counsel. Whether that plays well with the jury is the open question.

“Bill Sabbat is lead counsel for OpenAI... the point was made in the context of they want to hammer home: Elon is creating a competitive product, and also he keeps stressing that this is doom world ending technology, but at the same time he's ripping off the toss and using the technology to improve his own technology in an explicitly for profit company... Elon went out of his way to say everyone kinda does this. It's like an open secret in the industry.”

The distillation claim

The development Isaac flagged as the news of the day was Sabbat's assertion that xAI has been distilling OpenAI's models to improve Grok. The framing was designed to paint Musk as a hypocrite — publicly warning about AI's existential dangers while simultaneously using OpenAI's technology to build a for-profit competitor. Musk's response was that distillation is an open secret across the industry and that everyone does it to some degree. That may be roughly accurate, but it doesn't resolve the question of whether it violates OpenAI's terms of service, which is the actual legal exposure.

Jury dynamics

Jury selection on Monday produced some striking moments. Several prospective jurors said they didn't know what AI or AGI meant, despite being in the Bay Area. Isaac's read is that this kind of unfamiliarity benefits Musk, whose personal brand and theatrics may carry more weight with a less technically literate jury than OpenAI's document-heavy factual case. The jury is not sequestered, and the judge reminds them each day not to discuss the case or go online — a command Isaac acknowledges is almost impossible to enforce given how heavily this trial is being covered.

One legitimate concern raised is prediction markets. The case has generated enough public interest and open betting volume that a small group of jurors could, in theory, coordinate around an advisory verdict for financial gain. Court systems have no clear framework for this yet.

Witness lineup

Jared Birchall, Musk's family office manager, completed his testimony this week. OpenAI used his appearance to introduce an email showing a proposed equity structure for Musk — directly undercutting the "always intended as a charity" narrative Musk's side was trying to establish. There's also a procedural complication: Musk's lawyers may have inadvertently opened the door to discovery around his unsolicited bid for OpenAI's for-profit assets last year, which Birchall discussed on the stand. If the judge rules that line of questioning fair game, emails from that bid process could be admitted as new evidence — potentially damaging to Musk's side.

Next week's schedule includes AI safety researcher Stuart Russell and OpenAI co-founder Greg Brockman. Sam Altman is on the witness list but may not appear given the four-day court week.

Perception problem

Whatever the outcome, the trial is landing at a moment when the AI industry is only beginning to reckon with how badly public perception has deteriorated. Isaac notes that many in the industry are now aware they have a perception problem — but the lawsuit has been in the system for years and couldn't be timed away. Soundbites from the next few weeks of testimony are, as Isaac puts it, likely to end up on Bernie Sanders postcards.