In a Monday filing, Elon Musk escalated a brewing feud with Apple and OpenAI with a lawsuit that alleges both companies are colluding to entrench their monopolies in the rapidly growing market for AI chatbots. The filing from Musk, on behalf of his companies X and xAI, comes just weeks after Musk publicly lambasted Apple for disproportionately featuring OpenAI’s ChatGPT in App Store recommendations and its “Imagine” feature, while its competitor, Grok, has not appeared on the App Store’s “Must Have” list.

The filing goes well beyond gripes over App Store rankings, however, alleging that Apple and OpenAI made an exclusive deal that not only gives ChatGPT deep access to iPhone features but also blocks rival chatbots from reaching Apple’s installed user base. Musk argues the agreement violates antitrust and unfair competition laws and could doom his long-stated plans for building an “everything app” on Twitter, which he acquired in 2022.

The complaint, filed in California’s Northern District Court, notes that Apple added ChatGPT to iOS as a native feature and the default chatbot across Siri, Apple’s Writing Tools, and more. The deal gives OpenAI exclusive access to billions of user prompts, X argues, and provides a key data advantage for training and improving chatbot models. Without access to that data, X argues, rival services like Grok will be unable to scale and compete. The filing estimates OpenAI currently controls at least 80 percent of the chatbot market, and with Apple’s deep integration, may lock that in place permanently.

“Generative AI chatbots would vigorously compete with one another in a fair market. Instead, defendants’ anticompetitive conduct has handed a substantial portion of the market to ChatGPT,” the lawsuit states.

Apple is motivated to block rivals from surpassing the iPhone

X contends Apple’s rationale for the deal is simple fear that a successful rival super app could one day make iPhones less necessary, or, as in the case of WeChat in China, become an all-in-one replacement for many standalone iPhone functions. The complaint further quotes Apple executive Eddy Cue as having allegedly said AI tools could “destroy Apple’s smartphone business.” Musk’s filing instead paints Apple’s deal with OpenAI as an existential effort to maintain iPhone monopoly power, while also helping OpenAI establish an unbeatable lead in generative AI technology.

Details of alleged ‘superior’ deal

The complaint compares the deal to Apple’s exclusive search engine arrangement with Google, which the US Department of Justice and regulators in the European Union have alleged locked Google into a de facto monopoly position in search. Musk alleges that Apple not only blocked repeated requests from xAI to integrate Grok with iOS, but it also refused to even feature Grok in its App Store, including when it launched the “Imagine” feature. In addition, the filing further claims Apple manipulated App Store rankings and deliberately delayed Grok updates in order to suppress competition.

In a court filing published on its website, the company described Grok as its “AI-powered virtual assistant that helps users find things they care about on X and around the web.”

Musk argues that more than just Grok is at stake in the chatbot race, but the very future of AI platforms themselves. The filing notes that Apple’s Siri had 1.5 billion user requests per day worldwide in 2024, greater than the total number of prompts for all generative AI chatbots in 2024. If OpenAI alone receives those prompts, X argues, that would effectively give it control of up to 55 percent of all potential interactions with generative AI chatbots.

The lawsuit suggests the result for consumers could be nothing less than transformative if Apple succeeds in keeping other chatbots out. Apple users, it warns, could wind up with fewer choices and inferior chatbots. At the same time, the filing suggests Apple will be able to extract monopoly prices for iPhones, while OpenAI will face no constraints on its own market power and prices. The company has indicated it plans to double the price of its “plus” subscription over the next four years. “That plan would be unfeasible unless OpenAI has power over marketwide prices,” the lawsuit alleges.

Deal could chill investment in rivals, reduce AI innovation

Musk also cites a concern with reduced investment, since if Apple is going to “press its thumb firmly on the scale” for ChatGPT, X argues, other investors will see little value in backing rivals and will starve them of resources needed to compete. That could further cause talent to leave underfunded rivals and instead be scooped up by Big Tech firms.

The lawsuit further questions the economic rationale for Apple and OpenAI to have entered the deal. According to X, OpenAI provided ChatGPT to Apple for free, even paying to use Apple’s infrastructure, and Apple itself expects no near-term profit from the arrangement. X suggests both Apple and OpenAI place much more value on the broad competitive blocking the deal enacts than any direct revenue could provide.

“By making the deal exclusive, Apple sacrificed the profits it would have earned by integrating multiple chatbots. The true motive was Apple and OpenAI’s shared goal of blocking competition,” the complaint argues.

Musk is seeking billions in damages in the suit, in addition to a permanent injunction against Apple for its exclusive integration of ChatGPT. OpenAI, in a response to Ars Technica, rejected Musk’s claims as “meritless” and a continuation of Musk’s “ongoing pattern of harassment” against the company. Apple declined to comment.

Whether a court accepts Musk’s argument that Apple and OpenAI are illegally entrenching their market power could decide not only the fate of Grok but also the next phase of AI innovation writ large.