Elon Musk’s artificial intelligence venture xAI has filed a federal lawsuit accusing Apple and OpenAI of using an exclusive partnership to squeeze rivals out of the fast-growing generative chatbot sector.
The complaint, lodged on Monday in the northern district of Texas, says Apple’s integration of ChatGPT into iPhone, iPad and Mac operating systems “locked up markets” and gave OpenAI access to “the prompts and activity of millions of Apple customers”, while relegating competitors such as xAI’s Grok in App Store rankings.
The filing seeks billions of dollars in damages and argues that Apple controls roughly 65 per cent of the US smartphone market, while OpenAI commands about 80 per cent of the domestic chatbot market. It claims the two firms “have foreclosed competition among generative AI chatbots, deprived competing chatbots of scale, and reduced quality and innovation”.
xAI also alleges that Apple’s “exclusive deal” with OpenAI prevents the iPhone maker from giving prime visibility to Grok and to social media platform X, which xAI bought in March for $33bn. “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 says..
An OpenAI spokesperson dismissed the action. “This latest filing is consistent with Mr Musk’s ongoing pattern of harassment,” the company said.
Musk, who was a co-founder of OpenAI in 2015 before leaving three years later, had threatened earlier this month to sue Apple, claiming the company was “making it impossible” for other AI developers to top App Store charts. After the complaint was filed, he repeated his grievance on X, writing: “A million reviews with 4.9 average for @Grok and still Apple refuses to mention Grok on any lists”.
Legal scholars say the case could become an early test of how US courts define the boundaries of artificial-intelligence markets in antitrust law. Christine Bartholomew, a professor at the University at Buffalo School of Law, told Reuters the dispute is “a canary in the coal mine in terms of how courts will treat AI, and treat antitrust and AI”.
Apple’s App Store policies have already faced scrutiny in separate litigation brought by videogame developer Epic Games. In that case a judge ordered Apple to allow more competition in in-app payments, a ruling currently under appeal.
The xAI action underscores the escalating rivalry between Musk and OpenAI’s co-founder and current chief executive officer Sam Altman, whose company is reportedly pursuing a $500 billion valuation.
