BASTROP, USA – Elon Musk’s artificial intelligence company, xAI, filed a lawsuit on Monday, August 25, 2025 against Apple and OpenAI in U.S. federal court in Texas, accusing them of conspiring to block competition in the fast-growing AI market.
The lawsuit contends that Apple and OpenAI have “locked up markets to maintain their monopolies and prevent innovators like X and xAI from competing.”
Apple recently integrated OpenAI’s ChatGPT into its operating system for iPhones, iPads, and Macs. According to xAI, this exclusive arrangement has disadvantaged rival products such as its own Grok chatbot.
“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,” the complaint said.
The company is seeking billions of dollars in damages.
An OpenAI spokesperson responded sharply, describing the case as part of “Mr. Musk’s ongoing pattern of harassment.”
Apple did not immediately reply to requests for comment.
Mr. Musk had foreshadowed the legal action earlier this month, posting on his social media platform X that Apple’s conduct “makes it impossible for any AI company besides OpenAI to reach #1 in the App Store.”
Broader Legal Context
The case adds to mounting scrutiny of Apple’s App Store practices, which have already been challenged by Epic Games, the maker of “Fortnite.” In that case, a judge ordered Apple to allow more competition in app payment systems.
Legal experts said xAI’s claim could hinge on whether Apple’s dominance in smartphones amounts to illegal tying of its hardware with preferred AI software.
Herbert Hovenkamp, who teaches antitrust law at the University of Pennsylvania, said Apple may argue that integrating AI tools directly into its operating system serves security and operational needs.
The lawsuit could become one of the first major tests in American courts of how competition law applies to artificial intelligence — and whether AI should be considered a distinct market.
Musk’s Expanding AI Push
Musk launched xAI less than two years ago as a challenger to Microsoft-backed OpenAI and China’s DeepSeek. In March, xAI acquired his social media platform X for $33 billion, partly to enhance its AI training capabilities. He has also embedded the Grok chatbot into Tesla vehicles.
OpenAI’s ChatGPT remains a dominant force in the industry, having become the fastest-growing consumer application in history after its release in late 2022.
Musk is separately suing OpenAI and its chief executive, Sam Altman, in California over its transformation from a nonprofit into a for-profit venture. Musk, who co-founded OpenAI in 2015, has argued that the shift betrayed the group’s founding principles.
The outcome of xAI’s case against Apple and OpenAI could determine whether U.S. courts see AI partnerships as innovation or anticompetitive consolidation — and it may shape the future of competition in one of the world’s most closely watched industries.
