Elon Musk’s xAI Files Lawsuit Against Apple and OpenAI

Elon Musk’s xAI has initiated a federal lawsuit against both Apple and OpenAI, alleging that these tech giants are unlawfully conspiring to suppress competition within the artificial intelligence industry. Filed in Texas, this lawsuit contends that Apple’s move to incorporate OpenAI’s chatbot into its mobile operating systems represents an exclusive agreement that breaches competition laws.

This legal action, which follows a warning Musk issued earlier in the month, asserts that the collaboration has effectively “locked up markets to maintain their monopolies and hinder innovators like X and xAI from entering the fray.” The lawsuit calls for billions in purported damages, positing that there is no legitimate business justification for the exclusivity of the Apple-OpenAI partnership.

Key Claims in the Lawsuit

Central to the allegations is the assertion that the arrangement set for 2024 has artificially favoured OpenAI’s ChatGPT application in the App Store. This has allegedly hindered competing chatbot technologies from achieving scale and provided OpenAI access to the interactions and preferences of millions of Apple users. According to the lawsuit, this situation has “foreclosed competition among generative AI chatbots… and diminished quality and innovation,” thus allowing OpenAI to sustain approximately 80% of the generative AI chatbot market and enabling Apple to secure a 65% share of the smartphone market in the United States.

Musk’s Comments on Social Media

In a statement on his platform X, Musk reiterated the claims made in the lawsuit, mentioning that “A million reviews with an average of 4.9 for @Grok and yet Apple still neglects to feature Grok on any lists.”

Response from OpenAI

In response, a spokesperson from OpenAI characterised the lawsuit as “consistent with Mr. Musk’s ongoing pattern of harassment.”

This legal conflict indicates a significant deterioration in the relationship between Musk and OpenAI’s CEO, Sam Altman, who co-founded the AI company in 2015. The two have since evolved into adversaries, with Musk accusing Altman of deviating from OpenAI’s original non-profit intentions in favour of profit-seeking. This rivalry has escalated with Musk launching his own AI enterprises, including xAI and its chatbot Grok, aimed at competing directly with OpenAI.

Defence from Apple

While the lawsuit presents a narrative of a restrictive partnership, Apple has routinely defended its App Store methodologies as “fair and devoid of bias.” Various ChatGPT competitors, such as DeepSeek and Perplexity, have enjoyed prominence in its rankings at different times. Moreover, recent reports suggest that Apple is currently in discussions with Google about possibly integrating the Gemini chatbot to enhance its voice assistant, Siri.

Nevertheless, some antitrust legal authorities, who are not part of the case, have indicated that Apple’s commanding position in the smartphone arena might lend weight to xAI’s assertions that the company is unlawfully tying its iPhone sales to OpenAI’s ChatGPT.