Elon Musk’s artificial intelligence startup, xAI, has filed a lawsuit against Apple and OpenAI in a U.S. federal court in Texas, accusing them of conspiring to restrict competition in the fast-growing AI market.
The lawsuit seeks billions of dollars in damages and raises antitrust concerns about Apple’s integration of ChatGPT into its operating systems.
According to the filing, Apple and OpenAI have locked up markets to maintain their monopolies and prevent innovators like X and xAI from competing.
“If not for its exclusive deal with OpenAI, Apple would have no reason to refrain from more prominently featuring the X app and the Grok app in its App Store,” the lawsuit said.
xAI is claiming that the exclusive arrangement between Apple and OpenAI is preventing rivals from gaining visibility and market share.
Musk’s position
Musk, who acquired X in March for $33 billion to enhance xAI’s chatbot training capabilities, took to his social media platform to reinforce the lawsuit’s claims.
“A million reviews with 4.9 average for @Grok and still Apple refuses to mention Grok on any lists,” he posted on X.
Earlier this month, Nairametrics reported that Elon Musk accused Apple Inc. of giving preferential treatment to OpenAI on its App Store. He alleged that the iPhone maker’s ranking system makes it impossible for other developers, including his own AI venture, xAI Holdings, to reach the top spot.
The billionaire claimed in a post that Apple’s practices amount to playing politics.
“Apple is behaving in a manner that makes it impossible for any AI company besides OpenAI to reach #1 in the App Store, which is an unequivocal antitrust violation. xAI will take immediate legal action,” Musk posted.
According to Reuters, OpenAI dismissed Musk’s allegations, describing the lawsuit as part of his ongoing pattern of harassment, while Apple has yet to issue a response.
Expert opinions
Antitrust legal experts say Apple’s dominant position in the smartphone market could bolster xAI’s claims that the company is illegally tying its iPhone sales with OpenAI’s ChatGPT.
But they said Apple could counter that partnering with OpenAI was a business decision in a competitive environment, and that it has no obligation to help its rivals gain market share.
Herbert Hovenkamp, a professor at the University of Pennsylvania’s law school, said Apple may argue that its integration of OpenAI’s chatbot into iOS is based on security or operational reasons.
More broadly, the lawsuit could give courts in the United States their first opportunity to assess whether there is a defined market for AI and what it encompasses, a threshold issue in antitrust litigation
What you should know
OpenAI’s ChatGPT became the fastest-growing consumer application in history after its launch in late 2022, with rapid adoption across industries.
- Apple announced earlier this year that it was embedding OpenAI’s ChatGPT directly into its operating system for iPhones, iPads, and Macs. The partnership means users of Apple devices will increasingly interact with OpenAI’s chatbot rather than competitors like Musk’s Grok.
- Musk launched xAI launched two years ago to compete with OpenAI, Microsoft-backed AI projects, and Chinese startup DeepSeek. The company has since integrated its Grok chatbot into Tesla vehicles, extending its reach beyond smartphones and online platforms.
- This is not Musk’s first legal challenge against OpenAI. He co-founded the company with Sam Altman in 2015 as a nonprofit but is now suing to block its transition into a for-profit enterprise. Alongside his $97.4 billion unsolicited takeover bid for OpenAI, backed by xAI and a consortium of investors.
He said the goal was to restore OpenAI to its original nonprofit mission, but Altman dismissed the offer.
Apple has also faced multiple antitrust challenges over its App Store practices with Epic Games, the maker of “Fortnite,” a judge ordered Apple to allow more competition in app payment systems.
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