Elon Musk, the billionaire entrepreneur behind Tesla and SpaceX, has once again thrust himself into the center of the tech world’s most heated debates—this time, by launching a high-stakes lawsuit that targets both Apple and OpenAI. On August 25, 2025, Musk’s artificial intelligence venture, xAI, along with his social media company X, filed a lawsuit in a Texas federal court. The complaint alleges that Apple and OpenAI have conspired to dominate the rapidly expanding artificial intelligence (AI) industry, to the detriment of competitors and, ultimately, consumers.
The lawsuit specifically challenges an exclusive agreement between Apple—the world’s largest smartphone producer—and OpenAI, a leading AI research lab best known for its ChatGPT chatbot. According to the complaint, this partnership has allowed OpenAI’s technology to be embedded directly into iPhones, giving it a privileged position that other AI companies, including Musk’s own xAI, can’t match. The legal action accuses the two tech giants of collusion and anti-competitive conduct, arguing that their deal “effectively shut other AI companies out of an opportunity to reach tens of millions of customers,” as reported by ABC News.
At the heart of the dispute is Apple’s rollout of new generative AI features, collectively branded as Apple Intelligence, in June 2024. These tools include a language summarizer for messages and an image generator, all powered by OpenAI’s technology. Apple CEO Tim Cook described Apple Intelligence as the “next big step for Apple,” signaling the company’s intent to make AI a core part of its user experience. But for Musk and his legal team, the move represents a calculated effort to lock up the smartphone AI market in favor of OpenAI.
The lawsuit claims that by integrating OpenAI directly into the iPhone’s operating system—and, crucially, into Siri and other system features—Apple has made it nearly impossible for rival AI chatbots to compete on equal footing. While users can access OpenAI’s chatbot without even downloading a separate app, alternatives like xAI’s Grok are forced to rely on less convenient routes, such as individual app downloads or web access. This, Musk argues, creates a “friction” that unfairly disadvantages competitors and limits consumer choice.
“There is no valid business reason for the Apple-OpenAI deal to be exclusive,” Musk’s companies argue in the legal filing, according to the BBC. The complaint further alleges that the partnership hands OpenAI valuable data on how millions of users interact with AI, enabling it to refine its models and cement its dominance. “More users beget more prompts, and more prompts offer more opportunities to train the model, whose better features then attract even more users,” the lawsuit states.
The legal battle doesn’t stop at system integration. The lawsuit also takes aim at Apple’s App Store, suggesting that it artificially boosts ChatGPT’s visibility while suppressing rival offerings. This, the complaint claims, has helped OpenAI secure a staggering 80% share of the generative AI chatbot market. Given Apple’s commanding 65% share of the U.S. smartphone market, the implications for AI competition are enormous. As noted by BizClikMedia, “access to hundreds of millions of users represents enormous commercial value” for any AI company hoping to scale.
Yet the reality of the App Store marketplace is more nuanced than Musk’s legal team suggests. While ChatGPT enjoys clear advantages, other chatbot competitors—such as China’s DeepSeek and search-focused Perplexity—have managed to climb the App Store charts since 2024. These successes indicate that Apple’s platform isn’t entirely closed to non-OpenAI chatbots, though the path is undoubtedly steeper for those without system-level integration.
Apple, for its part, has consistently defended its App Store as “fair and free of bias.” The company has also reportedly explored partnerships with other AI providers, including Google, whose Gemini chatbot could soon be incorporated to further enhance Siri’s capabilities. These efforts to diversify AI partnerships could complicate Musk’s monopoly claims, as they suggest Apple is hedging its bets rather than locking in a single provider for the long haul.
Meanwhile, the legal clash is just the latest chapter in Musk’s increasingly public feud with OpenAI and its CEO, Sam Altman. Musk, who co-founded OpenAI in 2015 with the stated mission of advancing AI for the benefit of humanity, left the company in 2018 after a falling out over its direction. Since then, he has repeatedly accused OpenAI of abandoning its founding ideals in favor of commercial gain. In a separate legal action, Musk has also sued OpenAI directly, alleging a “betrayal of the company’s founding mission in a sprint toward profits,” as ABC News reported.
OpenAI, for its part, has dismissed Musk’s latest lawsuit as part of his “ongoing pattern of harassment.” In a statement to ABC News, the company said, “This latest filing is consistent with Mr. Musk’s ongoing pattern of harassment.” Apple, meanwhile, has declined to comment on the legal proceedings.
The stakes of the lawsuit are high—not only for the companies involved, but for the broader AI industry and the millions of consumers who rely on these technologies. Musk’s companies are seeking billions of dollars in damages, arguing that Apple and OpenAI’s arrangement “inhibits rivalry and innovation within the AI industry and harms consumers by depriving them of choice,” as Bloomberg reported. The case will test whether courts view exclusive AI partnerships as legitimate business arrangements or as anti-competitive barriers that stifle innovation and harm the public interest.
It’s worth noting that Apple’s App Store has long been under scrutiny from regulators and competitors over its market power and potential for anti-competitive conduct. The current case adds fresh legal pressure, coinciding with other prominent antitrust challenges facing tech giants, such as the ongoing examination of Google’s search engine dominance.
As the legal process unfolds, the outcome could set important precedents for how AI technologies are distributed and accessed on the world’s most popular devices. Will the courts side with Musk’s vision of an open, competitive AI marketplace? Or will they uphold the right of platform owners to strike exclusive deals in pursuit of innovation and user experience? For now, the tech world waits—and watches—closely as the battle lines are drawn in Texas.
Whatever the verdict, this lawsuit underscores the immense power and influence wielded by a handful of companies at the intersection of smartphones and artificial intelligence. The outcome could shape not just the future of AI competition, but the very way we interact with technology in our daily lives.
