Elon Musk filed a lawsuit against Apple and OpenAI on Monday, alleging that the two tech giants struck a deal to monopolize the rapidly growing AI chatbot market. Musk had previously criticized Apple for allegedly “favouring” OpenAI’s ChatGPT in the App Store and for refusing to list his own chatbot Grok as a “Must Have” app. The new lawsuit, filed on behalf of Musk’s social media company X and AI startup xAI, is the latest escalation in his growing feud against Apple and OpenAI.

The complaint, filed in San Francisco federal court, accuses Apple and OpenAI of antitrust and unfair competition violations through an exclusive arrangement that prevents competing chatbots from reaching iPhone users, while giving ChatGPT special and wide-ranging access to the platform’s features. Musk alleges that, through the deal, OpenAI will amass a monopoly over user data that will cement its dominance over rivals, which threatens to derail his efforts to build an “everything app” on top of Twitter.

Apple has given OpenAI “exclusive access to billions of user prompts” by integrating ChatGPT into iOS as the default across multiple chat features like Siri, Apple’s Writing Tools, and others, according to the lawsuit. These requests are key to improving and training generative AI models, and X alleges that without access to the iPhone as a “customer acquisition channel,” its rivals like Grok will struggle to scale. The company’s filing estimates that OpenAI already has at least 80 percent of the chatbot market share, and with Apple’s help, could reach “near-permanent, lock-in market dominance.”

“Generative AI chatbots would vigorously compete with one another in a fair market,” the lawsuit states. “Instead, defendants’ anticompetitive conduct has handed a substantial portion of the market to ChatGPT.”

The filing also suggests that Apple was primarily motivated by fear that a successful rival super app could one day replace iPhones as people’s primary digital platform. As the model has flourished in China, where WeChat serves as a kind of all-in-one replacement for numerous standalone smartphone functions, Apple has become “obsessed with ensuring that no such alternative super app emerges on iOS,” the lawsuit states. It even quotes Apple executive Eddy Cue as allegedly saying that breakthroughs in AI could “destroy Apple’s smartphone business.”

Apple-OpenAI Ties Even Deeper

The new complaint is in many ways analogous to the government’s long-running legal battle against Apple over its search engine deal with Google. That arrangement, U.S. regulators have argued, gave Google the resources and time to establish a dominant monopoly position over search. Musk’s filing accuses Apple of a similar strategy in AI, rejecting attempts by xAI to integrate Grok with iOS, while blocking requests to even feature Grok in the App Store, including during its new “Imagine” launch. The filing also claims that Apple unfairly manipulated App Store rankings and deliberately delayed Grok updates to stifle competition.

Musk’s lawsuit paints the broader implications for the rapidly growing market as grave. If allowed to stand, Apple’s users could have fewer choices and access to less capable chatbots, all while overpaying monopoly prices for iPhones. At the same time, OpenAI could leverage its market dominance to jack up subscription prices for ChatGPT, with the company’s public filings showing plans to double its “plus” subscription price over the next four years. “That plan would be unfeasible unless OpenAI has power over marketwide prices,” the filing argues.

The lawsuit also highlights the longer-term effect on competition that Apple’s actions could have. If Apple “presses its thumb firmly on the scale” for ChatGPT over multiple years, X contends that investors and customers could see little value in betting on rivals and pull the plug on funding them to grow. That could not only cost rivals the ability to grow, but they would also see their developers and other talent poached by Big Tech firms like Apple and OpenAI, as startups struggle to pay competitive wages in a defunded environment.

Finally, Musk is calling the financial sense of the Apple-OpenAI partnership into question. He alleges that OpenAI is effectively giving its ChatGPT model to Apple for free, with OpenAI paying all the costs of operating its internal large language model (LLM) for the partnership and Apple taking zero short-term profit. X suggests that both Apple and OpenAI know that the exclusivity of the arrangement, more than any near-term revenue generation, is far more valuable to entrenching their control over the market and blocking rivals.

“By making the deal exclusive, Apple sacrificed the profits it would have earned by integrating multiple chatbots,” the lawsuit states. “The true motive was Apple and OpenAI’s shared goal of blocking competition.”

The potential impact on Musk’s ambitions could be severe. If a court sides with Apple and OpenAI, Musk argues that Grok may never have a fair chance to compete, in turn making X less valuable to users and investors alike. “Because Grok’s functionality is a key feature of the X app, the X app is more attractive the better Grok performs,” the filing states. “Defendants’ conduct makes Grok less able to compete with ChatGPT, leading to fewer customers, less revenue, and ultimately a depressed enterprise value for X.”

Musk’s companies are seeking a permanent injunction preventing Apple’s exclusive integration of ChatGPT, as well as billions of dollars in damages. OpenAI pushed back to Ars Technica, saying that Musk’s “extreme legal theories” are “just the latest in his ongoing pattern of harassment.” Apple declined to comment.

The suit will now head to court, where a judge could ultimately decide whether Apple and OpenAI did illegally cement a duopoly over the future of AI innovation.