Musk vs Altman Round 2: xAI Takes Apple, OpenAI to Court on Monopoly Claims

Elon Musk’s AI start-up xAI filed an antitrust lawsuit in a US federal court in Texas, accusing Apple and OpenAI of conspiring to monopolise the markets for smartphones and generative AI chatbots.

xAI asks the court to unwind what it calls an exclusionary Apple–OpenAI tie-up and seeks billions of dollars in damages.

xAI’s complaint alleges that the partnership between Apple and OpenAI. under which Apple integrated OpenAI’s ChatGPT capabilities into its operating systems, unlawfully leverages Apple’s dominant position in the smartphone market to preserve OpenAI’s leadership in consumer AI.

The filing claims the arrangement “locked up markets” and prevented competitors such as xAI and its Grok chatbot from gaining meaningful exposure on Apple’s App Store.

Accusations, Claims & Immediate Responses

The suit says Apple and OpenAI “entered an unlawful agreement and conspiracy to leverage Apple’s monopoly power in the US smartphone market to maintain OpenAI’s monopoly power in generative AI chatbots.” xAI is seeking monetary damages and court remedies aimed at breaking what it describes as an anticompetitive lock-in.

OpenAI dismissed the lawsuit as part of a pattern of attacks by Musk. “This latest filing is consistent with Mr. Musk’s ongoing pattern of harassment,” an OpenAI spokesperson said. Musk amplified the legal claims on his social network, arguing that Grok’s high user ratings were not translating into App Store visibility.

Background

The case is the newest chapter in an increasingly public feud between Musk and Sam Altman, who cofounded OpenAI with Musk in 2015 before the two split.

xAI and Grok were launched as rivals to OpenAI’s ChatGPT; Musk has previously threatened litigation alleging that Apple’s App Store practices favour OpenAI and hinder competitors.

Antitrust scholars say the litigation raises novel questions about how courts should define markets in the age of AI.

Some experts cited in the complaint and press coverage note that Apple’s control over its ecosystem could bolster xAI’s claims, while Apple may counter that its integrations are ordinary competitive choices or motivated by security and user-experience considerations.

University of Pennsylvania law professor Herbert Hovenkamp and University at Buffalo law professor Christine Bartholomew were among commentators who framed the case as a potential bellwether for how judges treat AI market definitions and platform power.