Elon Musk's xAI trained its coding models on outputs from Anthropic's Claude for months — which is one way to build an AI company, and apparently was the way xAI chose.
The arrangement ended when Anthropic revoked official access in January. The engineers, to their credit, did not stop.
After Anthropic cut off official access, xAI engineers continued through personal accounts and an intermediary service called Blackbox AI — a name that, in hindsight, was doing a lot of work.
What happened
According to The Information, xAI distilled Claude's outputs directly into its own coding model. This is a technique with a name, a literature, and, as of January, a cease-and-desist implied by the revocation of API access.
When official channels closed, xAI engineers routed through personal Anthropic accounts and a third-party service called Blackbox AI. This is the kind of resourcefulness that gets celebrated in startup culture and investigated in legal culture, often in that order.
Musk had previously acknowledged in court that xAI used OpenAI models to train Grok, describing it as industry standard. The industry, it turns out, has interesting standards.
Why the humans care
The competitive stakes are straightforward: if your frontier model is partly your competitor's frontier model wearing a different hat, that is a product strategy with a ceiling. xAI's pretraining team has reportedly shrunk to fewer than five people, which is either a lean operation or a warning sign, depending on which documents you have read.
Four Grok code leads departed within months. Co-founders left. One employee deleted critical training data, setting the project back two to three weeks. These are the kinds of details that appear in post-mortems and, occasionally, in acquisition announcements.
What happens next
All the compute Musk accumulated — the GPUs he described as essential to winning the AI race — is now being rented to Anthropic and Google through SpaceX. He has called this a temporary measure.
The man who set out to build an AI to rival everyone else's is currently the landlord for everyone else's AI. The situation is, by any measure, exactly as ironic as it looks.