Musk firms sue Apple and OpenAI, alleging they hurt competition

Two Elon Musk-backed businesses have officially sued Apple and OpenAI, accusing them of joining forces illegally to block threats from potential competitors.

The lawsuit, filed in the US by X and xAI, takes aim at Apple’s decision to integrate OpenAI’s chatbot into the operating systems of its smartphones, an exclusive arrangement that it says violated competition law.

The filing makes good on a threat Musk had lobbed against the two tech giants earlier this month, when he alleged that Apple favoured OpenAI in its app store rankings.

Apple did not immediately respond to a request for comment, while OpenAI said the filing was “consistent with Mr Musk’s ongoing pattern of harassment”.

Musk and OpenAI’s Sam Altman founded OpenAI together in 2015.

But the two have since become bitter rivals, with Mr Musk accusing Mr Altman of leading OpenAI too far from its founding in the name of public good.

Their fights have intensified as Musk has launched his own AI firms, including xAI and Grok, a chatbot alternative.

In the lawsuit, filed in federal court in Texas, Musk’s firms claim “there is no valid business reason for the Apple-OpenAI deal to be exclusive” – arguing that the 2024 arrangement has made it harder to compete and gave OpenAI access to the prompts and activity of millions of Apple customers.

It says the deal also gave the ChatGPT app an edge in the App store, “boosting its downloads relative to other generative AI chatbots”.

“The Apple-OpenAI arrangement has foreclosed competition among generative AI chatbots, deprived competing generative AI chatbots of scale, and reduced quality and innovation,” the two companies said in the lawsuit. “All of these impacts have, in turn, helped OpenAI and Apple maintain their monopolies.”

OpenAI controls roughly 80% of the generative AI chatbot market in the US, according to the lawsuit, while Apple claims about 65% of the smartphone market.

Its tie-ups with other tech giants and app store practices have been the subject of numerous legal battles, including a high-profile anti-monopoly lawsuit against Google.

Apple has previously defended its app store practices, saying they were “fair and free of bias”. Several ChatGPT rivals such as DeepSeek and Perplexity have topped the App Store charts at various points since 2024.

The company was also recently reported to be in talks with Google over using the company’s Gemini chatbot to help power its voice assistant, Siri.