An artificial intelligence company, xAI, owned by billionaire entrepreneur Elon Musk, has launched a legal battle against tech giants Apple and OpenAI over alleged AI competition suppression.
Musk’s xAI filed the lawsuit before a Texas federal court on August 25, 2025, accusing Apple and OpenAI of allegedly suppressing healthy competition within the AI space.
The suit, initiated by Musk’s companies X Corp. and xAI, claimed that Apple’s exclusive partnership with OpenAI, integrating ChatGPT into iPhones, iPads, and Macs, unfairly sidelines competitors like xAI’s Grok chatbot.
The lawsuit alleged that Apple and OpenAI have allegedly conspired to “lock up markets” to maintain their monopolies in the smartphone and generative AI chatbot sectors.
The lawsuit also pointed to an alleged practice of Apple’s App Store, which it claimed deprioritized rival apps like Grok and X, preventing them from reaching top rankings.
This alleged AI competition suppression tactic, according to the lawsuit, gives OpenAI an edge by making ChatGPT the default generative AI chatbot for iPhone users.
“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.
“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,” the lawsuit alleged.
This development came after Musk had threatened to sue Apple, saying that Apple’s alleged behaviour “makes it impossible for any AI company besides OpenAI to reach #1 in the App Store”.
However, reacting to the accusations then, OpenAI CEO Sam Altman said in a post on X 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.”
Recall also that Musk had launched a separate lawsuit against OpenAI and its CEO, Altman, in federal court in California.
In the lawsuit, Musk is seeking an order to stop Altman from converting OpenAI from a nonprofit to a for-profit business.
Musk had cofounded OpenAI with Altman in 2015 as a nonprofit.
