Musk Companies Sue Apple and OpenAI, Allege Monopolistic Practices

iPhone users stand to lose as the tie-up between Apple and OpenAI allegedly increases prices and offers less features, according to the lawsuit.

Tesla CEO Elon Musk looks on as President Donald Trump talks to the media at the White House in Washington, on Mar. 11, 2025. Kevin Lamarque/Reuters

Elon Musk’s artificial intelligence (AI) startup xAI and its subsidiary X Corp. filed suit against Apple and ChatGPT maker OpenAI on Aug. 25, alleging monopolistic practices and illegal conspiracy to control the AI in smartphone devices.

The lawsuit, filed in federal court in Texas, features 10 claims altogether.

“Defendants Apple and OpenAI have locked up markets to maintain their monopolies and prevent innovators like X and xAI from competing,” the lawsuit reads, claiming billions of dollars in damages.

In June 2024, Apple announced a partnership with OpenAI whereby ChatGPT capabilities were integrated within the iOS platform.

According to the complaint, this “exclusive arrangement” made iPhone users dependent on ChatGPT, leaving them without access to other generative AI chatbots such as xAI’s Grok.

“Generative AI chatbots improve their models based on a continuous feedback loop. More users beget more prompts, and more prompts offer more opportunities to train the model, whose better features then attract even more users,” the complaint reads.

AI prompts used by millions of iPhone users solely benefit ChatGPT, making it difficult for competitors to “scale and innovate,” according to the complaint.

Apple has allegedly taken steps to “preference OpenAI” apps on its App Store, the complaint states.

These actions have allegedly resulted in customers losing out on cheaper and better alternatives, the lawsuit states.

“Apple is behaving in a manner that makes it impossible for any AI company besides OpenAI to reach #1 in the App Store, which is an unequivocal antitrust violation,” Musk said on X in an Aug. 11 post.

The lawsuit claims that Apple and OpenAI are violating several provisions of the Sherman Antitrust Act, which promotes fair competition between businesses in the marketplace while combating the formation and proliferation of monopolies.

In an emailed statement to The Epoch Times, an OpenAI spokesperson responded to the lawsuit, saying, “This latest filing is consistent with Mr. Musk’s ongoing pattern of harassment.”

In April, OpenAI had countersued Musk in a separate lawsuit for engaging in a harassment campaign against the company.

The issue arose after Musk filed suit against OpenAI for breaching its commitment to retain its nonprofit status, claiming that its conversion to a for-profit entity would cause broad harm to the public.

The OpenAI countersuit accused Musk of engaging in a “relentless” campaign against OpenAI through the press and “malicious campaigns” that were broadcast to more than 200 million people on his social media platform, X.

Musk is considered very active on his platform, where he has more than 220 million followers.

Banning Apple Devices

Musk has opposed the partnership between Apple and OpenAI, describing it as “an unacceptable security violation.” The Tesla CEO threatened to ban Apple devices from his companies’ premises at the time, although it is unclear whether the ban was ever enforced.

In April, U.S. District Judge Yvonne Gonzalez Rogers ruled that Apple violated a previous court order requiring it to change its App Store rules to allow greater competition among developers and referred the tech giant to federal prosecutors. Apple stated that it would comply with the order but disagreed with the court’s decision.

The ruling was issued as part of a legal dispute between Apple and Epic Games, the developer of the popular video game “Fortnite.” Epic Games filed suit against Apple in August 2020 after it was removed from the App Store for providing users with an alternative payment option to Apple’s in-app purchases.

The Epoch Times reached out to Apple for comment regarding the latest lawsuit but did not receive a response by publication time.

Aldgra Fredly contributed to this report.