Elon Musk’s AI startup, xAI, has sued Apple and OpenAI, accusing them of conspiring to shut out rivals in the fast-growing artificial intelligence market.
The lawsuit, filed in a Texas federal court on 25 August, is the latest escalation in Elon Musk’s long-running disagreement with OpenAI and its CEO, Sam Altman.
According to the complaint, Apple has given OpenAI an unfair advantage by integrating ChatGPT into iPhones, iPads, and Macs while sidelining Musk’s xAI products, including the Grok chatbot.
xAI claims that Apple manipulates App Store rankings to exclude Grok from its curated lists, despite the app’s high user ratings. Musk himself reinforced this point on X, writing: “A million reviews with 4.9 average for @Grok and still Apple refuses to mention Grok on any lists.”
The lawsuit alleges that Apple’s dominance in the smartphone market, holding roughly 65% in the United States, combined with OpenAI’s estimated 80% control of the generative AI chatbot market, has created what Musk calls a “duopoly.”
Lawyers for xAI argue that this exclusive arrangement violates U.S. antitrust law, particularly Sections 1 and 2 of the Sherman Act. The company is seeking billions of dollars in damages.
OpenAI, in response, dismissed the filing, saying: “This latest filing is consistent with Mr. Musk’s ongoing pattern of harassment.” Apple has so far declined to comment.
Legal experts say the case could become a watershed moment for how American courts define the AI market and apply competition law to emerging technologies. Christine Bartholomew, a law professor at the University at Buffalo, described it as “a canary in the coal mine in terms of how courts will treat AI, and treat antitrust and AI.”
Musk’s issue with OpenAI is not new. He co-founded the company in 2015 but left three years later after disagreements over its direction. Since then, he has repeatedly criticised its shift from nonprofit to for-profit, even filing a separate lawsuit to block the move. Earlier this year, Musk attempted to buy OpenAI outright for $97.4 billion, an offer the company rejected.
Beyond the fight, Musk is pursuing ambitions for xAI and his social media platform X. He envisions turning them into a “super app,” combining social networking, payments, and AI tools in a model similar to China’s WeChat.
Experts say Apple’s partnership with OpenAI could be seen as an attempt to neutralise that threat by locking users into its ecosystem.
The case draws comparisons to the U.S. government’s antitrust issue with Google, which centred on exclusive search deals with Apple.
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