Why Elon Musk Sues Apple Over its OpenAI ChatGPT iPhone Deal
Elon Musk is escalating his feud with OpenAI, launching a legal battle that brings Apple into the crossfire.
Two of his companies, X and xAI, are filing a lawsuit in Texas federal court, alleging the tech giants struck an anti-competitive deal that shuts out rivals from the lucrative smartphone AI market.
Musk is challenging Apple’s exclusive partnership with OpenAI – as the arrangement embeds OpenAI’s ChatGPT chatbot directly into iPhones, giving users access through Siri and other system features without requiring a separate app download.
Why xAI takes aim at ChatGPT’s smartphone advantage
The lawsuit strikes at the heart of the smartphone AI battle, where access to hundreds of millions of users represents enormous commercial value.
Musk’s xAI develops Grok, a rival chatbot that competes with ChatGPT in the fast-expanding Gen AI market – but Grok lacks the privileged access that ChatGPT enjoys on iPhones, forcing users to download a separate app or visit a website.
This friction, Musk’s lawyers argue, creates an unfair playing field.
“There is no valid business reason for the Apple-OpenAI deal to be exclusive,” the companies argue in their filing, according to the BBC.
They contend the partnership not only blocks competitors but also hands OpenAI valuable data about how millions of users interact with AI.
The exclusive arrangement also extends beyond system integration – as the lawsuit claims Apple’s App Store, the gateway for iPhone app downloads, artificially boosts ChatGPT’s visibility whilst suppressing competitors.
This alleged favouritism helped cement OpenAI’s dominance in a market the companies say it already controls with roughly 80% market share.
Why Apple’s app store is under fresh scrutiny
The case adds to mounting legal pressure on Apple’s app store practices, which regulators and competitors have long criticised as anti-competitive.
The iPhone maker commands about 65% of the US smartphone market, according to the lawsuit, making access to its platform crucial for AI companies seeking mass adoption.
Apple has consistently defended its app store as operating under “fair and free of bias” principles.
Yet the company faces multiple antitrust challenges, including a prominent case examining Google’s search engine dominance and its own market power.
The reality appears more nuanced than Musk’s lawsuit suggests.
Several ChatGPT rivals have managed to climb Apple’s App Store charts since 2024, including China’s DeepSeek and search-focused Perplexity.
These successes demonstrate that non-OpenAI chatbots can still find audiences on Apple’s platform, though perhaps without the systemic advantages ChatGPT enjoys.
Apple has also hedged its AI bets, reportedly holding talks with Google about incorporating its Gemini chatbot to enhance Siri’s capabilities.
Such diversification could complicate Musk’s monopoly claims.
Furthermore, the lawsuit is the latest chapter in Musk’s increasing rivalry with Sam Altman, OpenAI’s CEO.
The two entrepreneurs co-founded OpenAI in 2015 with a mission to develop AI for humanity’s benefit – yet their partnership soured as Musk accused Altman of abandoning those ideals in pursuit of commercial success.
Since launching xAI, Musk has repeatedly singled out OpenAI in public forums and threatened legal action. The company fired back, describing the lawsuit as part of Musk’s “ongoing pattern of harassment.”
Apple declined to comment on the legal filing. The case will test whether courts view exclusive AI partnerships as legitimate business arrangements or anti-competitive barriers that stifle innovation.
“The Apple-OpenAI arrangement has foreclosed competition among generative AI chatbots, deprived competing Gen AI chatbots of scale and reduced quality and innovation,” Musk’s companies argue in the lawsuit.
