August 26, 2025

Elon Musk’s xAI Sues Apple and OpenAI Over AI Monopoly

News Summary

Elon Musk’s xAI has filed a lawsuit against tech giants Apple and OpenAI in Texas federal court, accusing them of creating an AI monopoly to stifle competition. The lawsuit claims that a partnership between Apple and OpenAI limits the visibility of xAI’s Grok app in the App Store. Seeking billions in damages, Musk argues this legal battle is crucial for the future of artificial intelligence. As the dispute unfolds, it raises questions about the fairness of Apple’s business practices and the competitive landscape in the tech industry.

Texas – Billionaire entrepreneur Elon Musk’s artificial intelligence startup, xAI, has filed a lawsuit against technology giants Apple and OpenAI in a U.S. federal court in Texas. The lawsuit, submitted on Monday, accuses the two companies of conspiring to illegally suppress competition in the artificial intelligence (AI) sector, thereby maintaining monopolistic control.

In its allegations, xAI claims that Apple and OpenAI have “locked up markets” to hinder emerging startups like itself. The lawsuit asserts that Apple’s collaboration with OpenAI has caused significant disadvantages for competing AI technologies, particularly the Grok app developed by xAI. The complaint highlights that this exclusive partnership has integrated OpenAI’s ChatGPT into Apple devices, further diminishing the visibility and presence of rival applications in the App Store.

To illustrate its points, xAI argues that if not for Apple’s exclusive arrangement with OpenAI, both the X app and Grok would receive enhanced exposure in the App Store, which is crucial for attracting users. The startup is seeking substantial financial compensation, estimating damages in the billions of dollars as a result of the alleged anti-competitive practices.

An OpenAI representative responded to the lawsuit by characterizing it as part of Musk’s “ongoing pattern of harassment,” alluding to previous conflicts between the two parties. Apple has not yet publicly commented on the lawsuit, leaving questions about its potential impact on their practices unanswered.

This legal action is not Musk’s first confrontation with Apple regarding competition in the AI industry. He has previously threatened to initiate legal proceedings against Apple, stating that the company’s practices hinder competition in the burgeoning AI landscape. The intensifying rivalry comes as OpenAI’s ChatGPT, launched in late 2022, has become the fastest-growing consumer application in history, capturing a significant portion of the market.

Musk’s xAI, which he launched in 2023, aims to be a formidable competitor to companies like OpenAI. The startup managed to acquire X, the social media platform formerly known as Twitter, for $33 billion in March. Following this acquisition, Musk has emphasized the integration of the Grok chatbot into Tesla vehicles, aiming to enhance the capabilities of AI-driven communication within his products.

The lawsuit further claims that collusion between Apple and OpenAI extends to both the smartphone and generative AI markets, posing a threat to healthy competition and innovation. Both Musk and OpenAI CEO Sam Altman previously co-founded OpenAI in 2015, but their professional relationship has soured, resulting in disagreements over the company’s mission and direction.

In a counterclaim to xAI’s lawsuit, OpenAI asserts that Musk and xAI are engaged in a strategy of harassment through their litigation and aggressive social media campaigns. Tensions are evidently high between the parties as they navigate their respective positions in the competitive AI landscape.

This ongoing legal dispute also brings attention to pre-existing concerns regarding Apple’s App Store practices. The company has faced scrutiny from developers, including ongoing litigation initiated by Epic Games, aimed at seeking greater competition in app payment options. Last year, Apple’s partnership with OpenAI integrated ChatGPT features into its devices, with Apple representatives claiming that the App Store is, in principle, designed to be fair and unbiased.

Despite the claims made in the lawsuit, some observers have noted that rival chatbot applications have successfully ranked well in the App Store, suggesting that competition remains possible even with Apple’s current partnerships. The outcome of this lawsuit could have significant implications for the future of AI competition and best practices in tech industries.

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