Elon Musk’s artificial intelligence startup xAI, backed by his social media platform X, has taken legal action against Apple and OpenAI, accusing the two giants of forming an unlawful agreement that restricts fair competition in the fast-growing chatbot industry. The lawsuit, filed in a Texas federal court on August 25, 2025, argues that Apple granted OpenAI’s ChatGPT exclusive access to iPhone users through deep system integration, effectively sidelining competing AI services such as xAI’s Grok.

According to the 61-page filing, this arrangement not only boosts ChatGPT’s market dominance but also manipulates App Store rankings to push alternative apps further down, limiting consumer choice. Musk’s legal team claims the exclusivity allows ChatGPT to collect vast amounts of user interactions that strengthen its models, while rivals are denied comparable access, creating an uneven playing field. By embedding ChatGPT directly into Apple devices, the companies allegedly ensured that consumers would default to one service, reinforcing a monopoly and discouraging innovation.

xAI and X are seeking injunctive relief and damages that could amount to billions of dollars, in addition to a court order dismantling the alleged exclusivity deal. Musk has positioned the case as a fight for open competition in the AI market, warning that closed ecosystems stifle creativity and limit opportunities for newer players.

The lawsuit comes at a time of heightened scrutiny over the power of Big Tech and their role in shaping the AI landscape. Analysts believe the outcome could influence how regulators worldwide approach partnerships between platform owners and AI developers. For Musk, this marks another escalation in his ongoing feud with OpenAI, an organization he once co-founded but has since publicly criticized for straying from its original mission.