Apple and OpenAI Accused of "Locking Up" AI Markets in Landmark xAI Lawsuit

Elon Musk’s artificial intelligence (AI) ventures, X and xAI, have filed a lawsuit in U.S. federal court in Texas against Apple and OpenAI, alleging that the two companies have colluded to suppress competition in the AI sector. The filing, a formalization of Musk’s recent public accusations, asserts that Apple’s exclusive integration of OpenAI’s ChatGPT into its iOS ecosystem and App Store has unfairly disadvantaged xAI’s AI chatbot, Grok, and the X platform. The lawsuit accuses Apple and OpenAI of “locking up markets to maintain their monopolies and prevent innovators like X and xAI from competing” [1].

According to the complaint, Apple’s partnership with OpenAI has embedded ChatGPT directly into iPhones, iPads, and Macs, giving the chatbot a significant edge over competing products. X and xAI argue that Apple’s decision to promote OpenAI’s ChatGPT while limiting visibility for Grok has distorted competition and allowed OpenAI to maintain an 80% market share in the U.S. for generative AI chatbots [4]. The lawsuit claims Apple’s App Store rankings reflect this bias, with ChatGPT currently ranked second, while Grok has dropped from No. 5 to No. 23 in the App Store since the dispute began [1].

Musk’s legal action builds on a broader pattern of antitrust scrutiny against Apple’s App Store practices. The iPhone maker has faced multiple lawsuits, including one from Epic Games, which resulted in a court order requiring Apple to allow alternative payment methods for apps. The xAI suit adds another layer to these legal challenges, with the plaintiffs alleging that Apple’s exclusive arrangement with OpenAI violates antitrust laws by stifling innovation and limiting market access for smaller AI developers. An OpenAI spokesperson characterized the lawsuit as “consistent with Mr. Musk’s ongoing pattern of harassment,” while Apple did not immediately respond to requests for comment [2].

In March, Musk’s xAI acquired the social media platform X for $33 billion to enhance its AI training capabilities. Grok has since been integrated into Tesla vehicles, but the company continues to face headwinds from Microsoft-backed OpenAI and emerging Chinese AI firms such as DeepSeek. Musk has also separately pursued legal action against OpenAI and its CEO Sam Altman, challenging OpenAI’s transition from a nonprofit to a for-profit entity. The case highlights escalating tensions between Musk and Altman, who co-founded OpenAI in 2015, and underscores broader concerns about monopolistic practices in the AI sector [3].

The legal battle is unfolding against a backdrop of rapid growth in the generative AI market. OpenAI’s ChatGPT has maintained a dominant position since its launch in late 2022, with Apple’s integration further amplifying its reach. However, other AI chatbots such as DeepSeek and Perplexity have managed to top the App Store rankings at various points since 2024. If successful, the lawsuit could set a precedent for regulating exclusive partnerships in the tech sector and could compel Apple to revise its App Store practices to ensure fairer competition [4].

Source: [1] Elon Musk makes good on threat to sue Apple, claiming ... (https://sherwood.news/tech/xai-sues-apple-openai-elon-musk-chatgpt/) [2] Elon Musk's xAI sues Apple and OpenAI over AI ... (https://www.reuters.com/legal/litigation/elon-musks-xai-sues-apple-openai-over-ai-competition-app-store-rankings-2025-08-25/) [3] Elon Musk's xAI sues Apple and OpenAI over AI ... (https://www.cnn.com/2025/08/25/tech/elon-musk-xai-apple-openai-lawsuit-app-store-rankings) [4] Musk firms sue Apple and OpenAI, alleging they hurt ... (https://www.bbc.com/news/articles/cly6xjg9nnyo)