Elon Musk’s xAI sues Apple and OpenAI over AI competition and app store rankings

New Delhi: Elon Musk’s artificial intelligence startup xAI has filed a lawsuit against Apple and OpenAI in a U.S. federal court in Texas, alleging that the companies conspired to restrict competition in the artificial intelligence sector, according to Reuters.

The complaint claims that Apple and OpenAI have "locked up markets to maintain their monopolies and prevent innovators like X and xAI from competing." xAI is seeking billions of dollars in alleged damages.

As per the report the lawsuit also asserts, "If not for its exclusive deal with OpenAI, Apple would have no reason to refrain from more prominently featuring the X app and the Grok app in its App Store."

An OpenAI spokesperson described the filing as “consistent with Mr. Musk’s ongoing pattern of harassment.” Apple had not responded to requests for comment at the time of publication.

Musk reiterated the allegations on his social media platform X, stating, "A million reviews with 4.9 average for @Grok and still Apple refuses to mention Grok on any lists." Earlier this month, Musk had warned that Apple's practices "makes it impossible for any AI company besides OpenAI to reach #1 in the App Store.”

xAI, launched less than two years ago, competes with Microsoft-backed OpenAI as well as Chinese startup DeepSeek. The company acquired X in March for $33 billion to enhance its chatbot training capabilities, and Musk has integrated the Grok chatbot into Tesla vehicles. OpenAI’s ChatGPT, launched in late 2022, quickly became the fastest-growing consumer application in history.

Antitrust experts not involved in the case noted that Apple’s dominant position in the smartphone market could strengthen xAI's claims that the company is tying iPhone sales with OpenAI’s ChatGPT. However, Apple could argue that its partnership with OpenAI was a competitive business decision, with no obligation to support rivals, and that security or operational considerations justified integrating AI into its operating system, said Herbert Hovenkamp of the University of Pennsylvania Law School.

Separately, Musk is suing OpenAI and its CEO Sam Altman in federal court in California over its transition from a nonprofit to a for-profit business. Musk had cofounded OpenAI with Altman in 2015 as a nonprofit, as per the report.

Apple’s App Store practices have previously faced multiple legal challenges, including an ongoing case by video game maker Epic Games, in which a judge ordered Apple to allow greater competition for app payment options.