Elon Musk’s artificial intelligence (AI) startup xAI has filed a high-profile lawsuit against Apple (AAPL) and OpenAI. The tech giants have been accused of unfairly monopolizing the generative AI market on iPhones and stifling competition.
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Importantly, an OpenAI spokesperson has called the latest lawsuit “consistent with Mr. Musk’s ongoing pattern of harassment.”
Key Allegations in the Lawsuit
Filed in Texas, the complaint claims that the “exclusive arrangement” between AAPL and OpenAI, which integrates the ChatGPT service into iPhones, is anti-competitive. Also, the lawsuit alleges that this partnership has “locked up markets to maintain their monopolies and prevent innovators like X and xAI from competing.”
The suit claims that the deal gives Microsoft (MSFT)-backed OpenAI an unfair advantage by providing access to “potentially billions of user prompts” from iPhone users, which can be used to improve its models.
Further, the lawsuit states that Apple has suppressed competing AI chatbots, such as xAI’s Grok, in App Store rankings. As evidence, xAI cites delayed app reviews and exclusion from curated lists like “Must-Have Apps”.
Lawsuit Escalates Tensions with Apple and OpenAI
This lawsuit follows a public threat from Musk earlier this month. In a post on X, he accused Apple of “an unequivocal antitrust violation” and claimed that the company’s behavior makes it “impossible for any AI company besides OpenAI to reach #1 in the App Store.”
Further, the legal action deepens the ongoing feud between Musk and OpenAI CEO Sam Altman. Musk, a co-founder of OpenAI in 2015, left the company in 2018 amid disagreements about its future direction. He has since launched xAI to compete with OpenAI and other AI developers.
Musk separately sued OpenAI and Altman in March 2024 for abandoning the company’s mission of developing AI for the “benefit of humanity” in favor of profit. That case remains ongoing.