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Elon Musk has upped the ante in his battle with Apple and OpenAI, filing a lawsuit Monday that claims the companies colluded to establish “monopolies” in the rapidly expanding AI chatbot market. Musk’s move comes weeks after he publicly lambasted Apple for consistently favoring OpenAI’s ChatGPT in App Store promotions while his own Grok chatbot has yet to make the coveted “Must Have” list.

Filed on behalf of Musk’s companies X (Twitter) and xAI, the lawsuit goes much further than complaints over App Store rankings or store promotion treatment. It alleges Apple and OpenAI have struck an exclusive agreement giving ChatGPT unparalleled access to iPhone features and data, while simultaneously shutting out competitors from Apple’s platform and its billions of users. Musk says the deal violates antitrust and unfair competition laws and could potentially scuttle his much-touted plan to build an “everything app” atop the foundation of Twitter, which he acquired in 2022.

According to the filing, Apple granted OpenAI’s ChatGPT direct integration into iOS, pre-installing the chatbot as the default option for Siri, Apple’s Writing Tools, and other features. OpenAI, in turn, is exclusively using data from Apple’s customers to train its own models. That data, X argues, is key for training and improving chatbot models, and without it, competitors like Grok cannot scale. OpenAI is estimated to already control at least 80 percent of the chatbot market, and with Apple’s new deal to lock in ChatGPT as its default model, the lawsuit claims OpenAI could establish indefinite dominance.

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

X’s suit further contends Apple is acting out of a fear that a successful competitor to iPhone could someday be built into a “super app” that would reduce the phone’s centrality in a way that rivals the position WeChat has reached in China. The complaint even cites Apple executive Eddy Cue as expressing concerns AI could “destroy Apple’s smartphone business.” In the filing, Musk is painting the deal as an attempt by Apple to save its smartphone monopoly, at the same time, it helps OpenAI establish an insurmountable lead in generative AI.

Apple Rejects Integration Attempts, Exclusive Access Favors OpenAI

Musk’s filing compares Apple’s ChatGPT deal to its previous “search engine monopoly” with Google, which regulators have long argued entrenches Google’s dominance. X alleges Apple rebuffed repeated attempts by XAI to similarly integrate Grok with iOS and also refused repeated requests to feature Grok prominently in the App Store, including when the company’s new “Imagine” chat feature launched. The filing also claims Apple manipulated App Store rankings and delayed approval of Grok updates in an effort to stifle the competitor.

Apple’s integration is key, Musk argues, not just for the ability of Grok to compete, but for the future of AI platforms. According to the filing, Siri handled 1.5 billion user requests per day around the world in 2024, greater than the total prompts of all generative AI chatbots combined for the year. If that data is exclusively reserved for OpenAI, it would effectively control as much as 55 percent of all chatbot interactions, X argues.

The impact of such dominance could be significant, the filing warns. Apple customers could find themselves with fewer choices and less capable chatbots on iPhones while paying monopoly prices for both. Meanwhile, OpenAI could use its dominant position to raise subscription prices with no competitors left to constrain them; OpenAI has plans to double the cost of its “plus” subscription over the next four years, the suit notes. “That plan would be unfeasible unless OpenAI has power over marketwide prices,” it alleges.

Apple’s push for OpenAI, Musk also argues, could have a chilling effect on investment. If Apple continues to “press its thumb firmly on the scale in ChatGPT’s favor,” investors will not see much point in backing competitors, and those firms will lack the resources to grow. Developers, in turn, may lose out on large acquisition offers from Big Tech firms seeking to use their resources to scoop up top talent.

Unsurprisingly, the lawsuit also calls into question the financial incentives underpinning the Apple-OpenAI deal. According to X, OpenAI is in effect paying Apple to partner, having made ChatGPT available for free and shelling out an additional $10 million to Apple itself. Apple, on the other hand, is expecting no near-term profits from the arrangement. Instead, the filing suggests both companies value the deal primarily for how it broadly blocks access to rivals, allowing them to entrench their market positions.

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

Musk, who is also CEO of Tesla, the job he will return to after stepping down from X, now has a lot on the line. The lawsuit warns that without relief from Apple, Grok may never be able to fairly compete, and as such would be less attractive to both users and investors. “Because Grok’s functionality is a key feature of the X app, the X app is more attractive the better Grok performs,” the filing states. “Defendants’ conduct makes Grok less able to compete with ChatGPT, leading to fewer customers, less revenue, and ultimately a depressed enterprise value for X.”

The companies Musk represents are seeking billions in damages, as well as a permanent injunction blocking Apple from its exclusive integration of ChatGPT with iOS. OpenAI, in a statement to Ars Technica, dismissed the suit as part of a “continuing pattern of harassment” by Musk, while Apple declined to comment.

Whether a court rules in Musk’s favor on the question of Apple and OpenAI illegally entrenching monopolies could determine not just the fate of Grok but also the level of competition in AI innovation going forward.