Musk’s xAI Sues Apple, OpenAI Over Alleged AI Monopoly

The artificial intelligence startup xAI, founded by Elon Musk, filed a lawsuit against Apple and OpenAI for their alleged collaboration to restrict competition in the fast-growing AI industry.

The Texas federal court received the lawsuit on Monday which asserts that Apple and OpenAI have collaborated to restrict competition through their exclusive spot of ChatGPT on Apple devices.

“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 complaint states.

The filing alleges Apple has “locked up markets to maintain their monopolies and prevent innovators like X and xAI from competing.” Musk argues that Apple deprioritized xAI’s apps, such as Grok and social platform X, in its App Store rankings.

He claims that because of Apple’s exclusive partnership, “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,” as reported by Aljazeera.

Apple and OpenAI announced their deal in June 2024, integrating ChatGPT into iPhones, iPads, and Macs. Apple controls about 65 percent of the smartphone market. Grok, Musk’s “uncensored” chatbot, currently ranks third in Apple’s productivity apps behind Gmail and ChatGPT, as noted by WIRED.

OpenAI dismissed the lawsuit, with a spokesperson saying, “This latest filing is consistent with Mr. Musk’s ongoing pattern of harassment,” as reported by CNBC.

CEO Sam Altman previously responded to Musk’s threats by saying:

This is a remarkable claim given what I have heard alleged that Elon does to manipulate X to benefit himself and his own companies and harm his competitors and people he doesn’t like. https://t.co/HlgzO4c2iC

— Sam Altman (@sama) August 12, 2025

The lawsuit is the most recent development in the ongoing legal and public disputes between Musk and Altman. Musk co-founded OpenAI in 2015 but left in 2018, later creating xAI to rival his former company. He has since filed a separate lawsuit against OpenAI for violating its nonprofit mission.

ALjazeera notes that Apple’s stock price continued to rise by 0.6 percent after the lawsuit announcement on Wall Street. The stock price of Tesla which is another Musk company, increased by 1.2 percent.