Elon Musk’s xAI Startup is Suing Apple and OpenAI for “Thwarting Competition and Innovation”

Elon Musk’s xAI startup is suing Apple and OpenAI over an alleged alliance to restrict competition in the AI space. The lawsuit, which was filed in the federal court in Fort Worth, claims that the integration of OpenAI’s ChatGPT into Apple Intelligence is making it impossible for xAI’s Grok and other AI chatbots to compete on fair terms.

“As a result of Apple and OpenAI’s exclusive arrangement, ChatGPT is the only generative AI chatbot that benefits from billions of user prompts originating from hundreds of millions of iPhones. This makes it hard for competitors of ChatGPT’s generative AI chatbot and super apps powered by generative AI chatbots to scale and innovate,” the lawsuit reads. “Worse still, Apple has taken further steps to protect its monopoly in smartphones and to preference OpenAI by deprioritizing the apps of competing generative AI chatbots and super apps in its App Store rankings, and it has dragged out its App Store app review processes for those competitors.

These statements echo previous accusations from Elon Musk, who posted on X on August 12 that “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.” This accusation received a quick reply from OpenAI CEO Sam Altman, who said that “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.”

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

At the time, Musk’s post received Community Notes from X users pointing out that the Chinese chatbot DeepSeek managed to reach the #1 spot on the App Store back in January, one month after the OpenAI integration into ChatGPT went live. Another note highlighted that Perplexity also became the number one app on the App Store in India last month.

Even Apple felt the need to issue a statement dismissing Musk’s App Store bias claims. “We feature thousands of apps through charts, algorithmic recommendations and curated lists selected by experts using objective criteria” the company said on August 13.

The lawsuit claims that OpenAI controls “at least 80 percent” of the generative AI market, while xAI’s Grok “has yet to gain more than a few percent of the market despite accolades about its superior features.” xAI is also seeking to “recover billions in damages” caused by this alleged monopoly.

In a statement shared with The Verge, OpenAI spokesperson Kayla Wood said “This latest filing is consistent with Mr Musk’s ongoing pattern of harassment.” Apple has yet to comment on the lawsuit.