Elon Musk’s artificial intelligence startup xAI has filed an antitrust lawsuit against Apple and OpenAI, accusing both tech giants of conspiring to dominate the smartphone and AI chatbot markets through anti-competitive practices.
Lodged in a U.S. federal court in Texas, the lawsuit seeks billions of dollars in damages and aims to disrupt the exclusive partnership between Apple and OpenAI that xAI says “unfairly locks out competitors” like itself.
The exclusive partnership between Apple and OpenAI is the major point of this lawsuit, as both companies recently came to an agreement to integrate ChatGPT into Apple’s line of products (iOS, iPadOS and macOS).
“In a desperate bid to protect its smartphone monopoly, Apple has joined forces with the company that most benefits from inhibiting competition and innovation in AI: OpenAI, a monopolist in the market for generative AI chatbots,” the lawsuit said.
“OpenAI’s exclusive arrangement has made ChatGPT the only generative AI chatbot integrated into the iPhone. This means that if iPhone users want to use a generative AI chatbot for key tasks on their devices, they have no choice but to use ChatGPT, even if they would prefer to use more innovative and imaginative products like xAI’s Grok,” the lawsuit continued.
The lawsuit further alleges that Apple and OpenAI have used their dominant market positions to maintain monopolies in their respective field, as Apple holds about 65% of the U.S. smartphone market and OpenAI commands around 80% of the generative AI chatbot market. Together, both tech giants allegedly prevent innovators like xAI and its AI chatbot Grok from competing on an equal footing.
The lawsuit also points to Apple’s App Store practices as part of the anti-competitive scheme. xAI claims that Apple manipulates the rankings on its App Store to prioritize OpenAI’s ChatGPT app while sidelining competing AI apps like xAI’s Grok.
Despite Grok’s high user ratings and growing popularity, it has not been featured in Apple’s “Must Have” app categories, unlike ChatGPT, which allegedly enjoys preferential treatment, xAI claims. Musk, in a post on his social media platform X, wrote that, “A million reviews with 4.9 average for @Grok and still Apple refuses to mention Grok on any lists.”
xAI is seeking both substantial financial damages and an injunction to stop the alleged anti-competitive practices so that the AI startup and other competitors may have the fair chance to compete fully in the GenAI market.
In response to this lawsuit, an OpenAI spokesperson said in a statement, “This latest filing is consistent with Mr. Musk’s ongoing pattern of harassment.” This legal action comes amid a long-standing feud between Musk and OpenAI’s CEO Sam Altman. Musk was initially a co-founder of OpenAI in 2015 but left in 2018 due to differences in the startup’s direction.
