TLDR
- Elon Musk’s xAI and X Corp filed an antitrust lawsuit against Apple and OpenAI in Texas federal court Monday
- The lawsuit claims Apple and OpenAI created an exclusive iPhone AI integration that blocks competitors like Grok
- ChatGPT controls 80% of the AI chatbot market while Grok holds only a few percent despite claimed superior capabilities
- The complaint seeks billions in damages and court orders to end the alleged anticompetitive arrangement
- Apple and OpenAI deny wrongdoing, with OpenAI calling it part of Musk’s “ongoing pattern of harassment”
Elon Musk’s companies xAI and X Corp filed a federal antitrust lawsuit Monday against Apple and OpenAI in the Northern District of Texas. The suit alleges the tech giants created an exclusive arrangement that prevents competitors from accessing iPhone AI integration.
The lawsuit targets Apple’s June 2024 decision to make ChatGPT the exclusive AI chatbot integrated into iOS. This arrangement gives ChatGPT “exclusive access to billions of user prompts originating from hundreds of millions of iPhones” while blocking competitors like xAI’s Grok, according to the complaint.
ChatGPT currently controls “at least 80 percent” of the generative AI chatbot market. Grok holds only “a few percent” despite what Musk’s companies claim are superior capabilities. The exclusive iPhone integration allows users to receive Siri responses powered by ChatGPT, use AI for photo analysis, and access writing tools through OpenAI’s technology only.
Market Control and App Store Rankings
The lawsuit also accuses Apple of manipulating App Store rankings to favor ChatGPT over competitors. Despite Grok ranking second in Apple’s “Productivity” category and X ranking first in “News,” neither appears in the “Must-Have Apps” section where ChatGPT is featured.
Musk’s companies claim Apple delayed approval for Grok app updates and rejected featuring requests. The complaint quotes former Apple App Store director Phillip Shoemaker acknowledging that rankings are often “arbitrary” and that Apple has struggled with using the App Store as a weapon against competitors.
Revenue Sharing and Monopoly Claims
According to the filing, OpenAI plans to raise ChatGPT’s premium fee to $44 by 2029 and share revenue with Apple. The lawsuit describes this as collecting “monopoly rents” from the exclusive arrangement.
The complaint alleges Apple fears “super apps” could make iPhones obsolete, threatening its 65 percent U.S. smartphone market share. Musk’s companies describe the situation as “two monopolists joining forces to ensure their continued dominance.”
The lawsuit seeks billions in damages and court orders to end the exclusive arrangement. It also demands equal integration opportunities for AI competitors on iPhone devices.
Apple stock closed down 0.2% at $227.16 on Monday, while Tesla stock rose 1.9% to $346.60. OpenAI responded by calling the lawsuit part of Musk’s “ongoing pattern of harassment.” Apple stated earlier this month that “The App Store is designed to be fair and free of bias.”
The case comes after Musk threatened legal action on August 11, claiming Apple was favoring OpenAI’s ChatGPT over rival AI systems.
