Musk Takes On Apple, OpenAI In Antitrust Showdown Over Chatbots 

Elon Musk’s X and xAI have filed a federal lawsuit in Fort Worth, Texas, accusing Apple and OpenAI of “locking up markets” to preserve their monopolies and shut out rivals. This comes as Musk’s long-running feud with OpenAI chief Sam Altman intensifies.

The lawsuit centers on Apple’s recent deal to make OpenAI’s ChatGPT the only generative AI chatbot on the iPhone’s operating system, effectively shutting out xAI’s Grok and other rivals, such as Google’s Gemini and Anthropic. 

The lawsuit’s introduction argues that Apple and OpenAI have teamed up to protect their monopolies in smartphones and AI chatbots:

This is a tale of two monopolists joining forces to ensure their continued dominance in a world rapidly driven by the most powerful technology humanity has ever created: artificial intelligence (“AI”). Working in tandem, Defendants Apple and OpenAI have locked up markets to maintain their monopolies and prevent innovators like X and xAI from competing.1 Plaintiffs bring this suit to stop Defendants from perpetrating their anticompetitive scheme and to recover billions in damages.

AI is fundamentally reshaping our world. Technology powered by AI has not only become embedded in our daily lives but is also transforming critical sectors like healthcare, education, and finance. The consensus among global business leaders, academics, and scientists is that AI adoption is both unavoidable and transformational—and businesses that do not plan for it risk falling behind.

As Apple now recognizes, AI poses an existential threat to its business. For example, AI is rapidly advancing the rise of “super apps”—i.e., multi-functional platforms that offer many of the services of smartphones, such as social connectivity and messaging, financial services, e-commerce, and entertainment—that do not require a customer to be tied to a particular device. In other words, super apps, like those being developed by X and xAI, stand ready to upend the smartphone market and Apple’s entrenched monopoly in it.

The writing is on the wall. Apple’s Senior Vice President for Services, Eddy Cue, has expressed worries that AI might destroy Apple’s smartphone business, just as Apple’s iPhone did to Nokia’s handsets.

Apple knows it cannot escape the inevitable—at least not alone. 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.

OpenAI quickly rose to dominance in the generative AI chatbot market after introducing its flagship service, ChatGPT, in 2022. Today, OpenAI controls at least 80 percent of the market. Because of OpenAI’s monopoly, other generative AI chatbots have struggled to gain share. xAI’s Grok has yet to gain more than a few percent of the market despite accolades about its superior features. 

Just like Apple, OpenAI has incentive to protect its monopoly by thwarting competition and innovation in the generative AI chatbot market. And just like Apple, it has done so in violation of the antitrust laws.

In June 2024, Apple and OpenAI announced that Apple would integrate OpenAI’s ChatGPT into Apple’s iPhone operating system (“iOS”). Apple and 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. An OpenAI strategy document recognized the importance of competition in this emerging and transformational space: “Real choice drives competition and benefits everyone. Users should be able to pick their AI assistant.” Yet Apple and OpenAI have colluded to prevent exactly that.

X and xAI argue:

If not for its exclusive deal with OpenAI, Apple would have no reason to refrain from more prominently featuring the X app and the Grok app in its App Store. 

Just a few weeks ago, Musk threatened Apple with legal action over alleged antitrust violations regarding the App Store rankings of the Grok AI chatbot. He wrote in an X post that Apple’s behavior “makes it impossible for any AI company besides OpenAI to reach #1 in the App Store.”

Apple is behaving in a manner that makes it impossible for any AI company besides OpenAI to reach #1 in the App Store, which is an unequivocal antitrust violation.

xAI will take immediate legal action.

— Elon Musk (@elonmusk) August 12, 2025

Musk is seeking an injunction to block Apple and OpenAI’s exclusive chatbot deal and billions in damages. If successful, the case could reshape how AI bots are distributed on smartphones.