Elon Musk’s xAI sues Apple and OpenAI over AI Competition

Billionaire Elon Musk’s startup xAI has sued Apple and OpenAI in a Texas federal court, accusing them of illegal collusion to suppress competition in artificial intelligence. The lawsuit claims that Apple and OpenAI have maintained market dominance by preventing competitors like xAI from gaining footholds. Specifically, the suit states that Apple’s integration of ChatGPT into its devices, alongside its exclusive deal with OpenAI, hinders other apps like xAI’s Grok from being prominently featured in the App Store. xAI is seeking billions in damages.

In response, an OpenAI spokesperson dismissed the lawsuit as harassment, while Musk echoed the allegations on social media, criticising Apple’s refusal to list Grok despite positive reviews. Musk has previously threatened to sue Apple over what he describes as unfair practices that block AI competitors from ranking highly on the App Store.

Also Read: ‘Vibe Coding’ Event by Cognizant Breaks Global Record

Musk’s xAI, launched less than two years ago and which acquired Twitter (X) for $33 billion in March, competes with OpenAI and other startups. Musk has also integrated Grok into Tesla vehicles. The lawsuit raises broader issues about whether markets for AI are sufficiently defined for antitrust law, with legal experts noting Apple’s strong market position might support xAI’s claims of tying products. However, critics argue that partnerships like this are standard competitive strategies. 

The case could become a landmark for how US courts approach antitrust issues in AI. Other legal actions include Musk’s separate lawsuit against OpenAI and its CEO, challenging the nonprofit’s transition to a for-profit. Meanwhile, Apple’s App Store has faced previous litigation over its practices, including a case involving Epic Games and the game Fortnite.