xAI Sues Apple and OpenAI Over Anticompetitive AI Favoritism in App Store

xAI, the artificial intelligence company co-founded by Elon Musk, has filed a lawsuit against Apple and OpenAI in a Texas federal court, accusing the two companies of stifling competition through Apple’s preferential treatment of OpenAI’s ChatGPT within its App Store ecosystem. The 61-page complaint argues that Apple’s integration of ChatGPT as an operating system-level “answer engine” gives OpenAI an unfair advantage by granting it exclusive access to user data and boosting its visibility within Apple’s app rankings [1].

The lawsuit highlights how Apple’s decision to partner with ChatGPT—instead of relying on its own underdeveloped AI tools—has effectively marginalized xAI’s Grok chatbot. According to the filing, Apple’s favoritism undermines fair competition and constitutes an antitrust violation by making it nearly impossible for any AI company other than OpenAI to secure the top spot in the App Store [1]. Musk, who has long criticized OpenAI’s shift from a nonprofit to a for-profit entity, has now extended that conflict to Apple, which he claims has become complicit in suppressing xAI’s market presence [1].

This legal action builds on Musk’s previous lawsuit against OpenAI, filed in 2024, where he accused the company of deviating from its original mission to serve the public good in favor of aggressive profit-seeking [1]. In response, OpenAI has previously filed a countersuit accusing Musk of harassment. Now, the company is characterizing this new litigation as part of Musk’s “ongoing pattern of harassment” [1].

Apple’s integration of ChatGPT into its operating system is a significant move that reflects the growing importance of AI in consumer technology. The lawsuit suggests that Apple’s decision was not only strategic but also anticompetitive, giving OpenAI an unfair informational edge while disadvantaging rivals like xAI [1]. This case could have broader implications for how tech platforms integrate third-party AI tools and whether such integrations violate antitrust laws.

The legal battle adds another layer of tension to the already contentious relationship between Musk and OpenAI. While OpenAI maintains strong ties with Microsoft, Apple’s partnership with the AI firm has further aligned their interests in a space where competition is intensifying. However, the lawsuit indicates that Apple may not be seen as a neutral platform by all, particularly by those who feel excluded from its ecosystem [1].

The outcome of the case remains uncertain but is expected to influence future regulatory scrutiny of how major tech platforms handle AI partnerships. If the court sides with xAI, it could set a precedent for how integration deals between big tech firms and AI startups are evaluated for antitrust compliance. Conversely, if Apple and OpenAI prevail, it could signal that such strategic alliances are legally defensible under current antitrust frameworks [1].

Source: [1] xAI sues Apple and OpenAI (https://fortune.com/2025/08/26/xai-sues-apple-and-openai/)