Elon Musk's xAI has initiated legal action against Apple and OpenAI, alleging anticompetitive practices that stifle innovation and disadvantage competitors like xAI in the artificial intelligence market. The lawsuit, filed in a Texas federal court, claims that Apple and OpenAI are colluding to "lock up markets" and maintain their monopolies within the smartphone and generative AI chatbot sectors. xAI is seeking billions of dollars in damages and a court order to prevent the alleged illegal tactics.
The core of xAI's argument revolves around Apple's partnership with OpenAI, which integrates ChatGPT into Apple's operating systems for iPhones, iPads, and Macs. This integration makes ChatGPT the default generative AI chatbot for hundreds of millions of iPhone users, giving it an unparalleled advantage in scaling and innovation. xAI contends that Apple is unfairly favoring OpenAI by "deprioritizing the apps of competing generative AI chatbots and super apps" in its App Store rankings and dragging out the app review processes for those competitors. Specifically, the lawsuit points to the fact that xAI's Grok chatbot has not been featured in Apple's "Must-Have Apps" guide, despite receiving positive user reviews. Musk himself has claimed that Apple's behavior "makes it impossible for any AI company besides OpenAI to reach #1 in the App Store".
However, some evidence suggests that other AI apps have reached the top of the App Store charts, even after the Apple-OpenAI partnership was formed. For instance, the Chinese AI chatbot DeepSeek was ranked #1 in January. Apple has also stated that its App Store is "designed to be fair and free of bias," and that it features apps through charts, algorithmic recommendations, and curated lists selected by experts using objective criteria.
Adding another layer to the dispute is the alleged underperformance of xAI's Grok chatbot compared to its competitors. While Grok 3 has demonstrated strong performance on certain benchmarks, particularly in mathematical reasoning, scientific analysis, and coding tasks, some critics argue that its real-world performance does not always live up to the hype. For example, Grok 4 Heavy underperformed in tests, delivering outputs that were less detailed and lacking in functionality. Some users have reported that older models outperform Grok in various tasks.
Despite these criticisms, Grok has several strengths. Grok 3 integrates with X (formerly Twitter), enabling real-time data processing and synthesis of up-to-the-minute information. It also features a "Big Brain" mode that allocates additional compute resources for complex problem-solving. Grok's supporters also claim its real-time relevance, humor, and truth-seeking adaptability make it ideal for dynamic scenarios such as live news analysis or creative brainstorming.
OpenAI has responded to xAI's lawsuit by accusing Musk of harassment, citing his "ongoing pattern of attacks against the company". Musk co-founded OpenAI in 2015 but has since become a vocal critic, particularly after leaving the company in 2018. He has also filed a separate lawsuit against OpenAI, challenging its transition from a nonprofit to a for-profit entity. Antitrust experts suggest that Apple's dominant position in the smartphone market could strengthen xAI's claims. However, they also note that Apple could argue that its partnership with OpenAI was a legitimate business decision in a competitive environment.
