Tesla also explained the principles of a rotating magnetic field and induction motor by demonstrating how to make a copper egg stand on end using a device he constructed known as the Egg of Columbus.

By 1892 Edison's company was consolidated into the conglomerate General Electric by financier J. P. Morgan and the new company (by then switching over to an all AC system) was involved in take over attempts and patent battles withWestinghouse Electric. Although a patent sharing agreement was signed between the two companies in 1896 Westinghouse was still cashed strapped from the financial warfare. To secure further loans Westinghouse was forced to revisit Tesla's AC patent, which bankers considered a financial strain on the company (at that point Westinghouse had paid out an estimated $200,000 in licenses and royalties to Tesla, Brown, and Peck). In 1897, Westinghouse explained his financial difficulties to Tesla in stark terms, saying that if things continue the way they were he would no longer be in control of Westinghouse Electric and Tesla would have to "deal with the bankers" to try to collect future royalties. Westinghouse convinced Tesla to release his company from the licensing agreement over Tesla's AC patents in exchange for Westinghouse Electric purchasing the patents for a lump sum payment of $216,000;:73–74 this provided Westinghouse a break from what, due to alternating current's rapid gain in popularity, had turned out to be an overly generous $2.50 per AC horsepower royalty.