Elon Musk has taken legal action against Apple and OpenAI this week, in a lawsuit that accuses the two companies of colluding to protect their respective monopolies in the rapidly growing AI chatbot sector. The filing, submitted on Monday, builds on Musk’s complaints earlier this month that Apple has been unfairly promoting OpenAI’s ChatGPT app while blocking and ignoring his own Grok chatbot.

Filed by Musk’s companies X and xAI, the lawsuit alleges Apple and OpenAI have conspired to create an exclusive deal that not only provides ChatGPT with unprecedented access to iPhone features, but also blocks rivals from reaching Apple’s hundreds of millions of users. Musk is asking a court to bar Apple from integrating OpenAI’s ChatGPT into its iOS software in an exclusive arrangement, and claims the companies have violated antitrust and unfair competition laws.

The filing also lays out evidence of how Apple integrated ChatGPT as the default chatbot into Siri, Apple’s Writing Tools, and other features. That effectively gave OpenAI exclusive access to billions of user prompts that its AI can learn from, according to X’s filing. Grok, the chatbot developed by Musk’s company xAI, is not integrated with iOS in the same way, and X argues the company was locked out of Apple users, preventing it from scaling its services.

Apple and OpenAI have denied the allegations

The exclusive integration also means OpenAI is already “positioned to control the majority of the market, at least 80 percent by some measures,” while blocking rivals from building competing apps, according to the complaint. Apple’s deal with OpenAI, Musk argues, has given ChatGPT an overwhelming advantage in a new market with high switching costs, threatening to derail Musk’s much-hyped plan to build a super app on top of the Twitter platform he bought in 2022.

The lawsuit also claims Apple was deliberately motivated by the threat of a successful competitor that could one day eclipse the iPhone’s importance to users, in much the same way WeChat in China has become an all-in-one platform replacing many individual smartphone features and apps. An Apple executive, Eddy Cue, is also quoted in the filing, allegedly warning that advances in AI could “destroy Apple’s smartphone business.” Musk’s filing portrays Apple’s decision to partner exclusively with OpenAI as a last-minute desperation move to save its phone monopoly, and OpenAI’s plan to build what could be a generative AI monopoly.

OpenAI and Apple are underdogs in a growing market

The complaint describes the Apple-OpenAI deal as “quintessentially exclusionary” and compares it to the company’s long-standing search engine arrangement with Google, which U.S. regulators have accused of entrenching Google’s search monopoly. Musk’s legal team alleges Apple repeatedly rejected attempts by xAI to secure a similar arrangement for Grok, including refusals to feature Grok in the App Store even when it first launched the new “Imagine” feature. The filing also claims Apple further “manipulated” App Store rankings and held up Grok updates to stifle competition.

The lawsuit, by extension, argues Musk has the right to a fair chance to compete, which Apple has prevented with the ChatGPT deal. Siri already processes 1.5 billion user requests every day globally, the suit notes, which dwarfs the total number of prompts collected across all generative AI chatbots in 2024. If OpenAI is the only company to receive prompts from Siri, for instance, it “effectively controls between 45 and 55 percent of all possible chatbot interactions,” the filing says.

Apple and OpenAI’s deal could have direct consequences for consumers, X’s lawsuit warns, in the form of fewer choices, less powerful chatbots, and higher prices due to Apple’s iPhone monopoly. Apple consumers may also have to pay more for OpenAI’s services in the future, it says, as the company plans to double its “plus” subscription price over the next four years, from $20 to $40 per month. “That plan would be unfeasible unless OpenAI has power over marketwide prices,” it adds.

Apple’s iPhone dominance could be similarly impacted

The exclusivity is also hurting investors and potential rivals, the lawsuit alleges, by making it less attractive to back rival developers and super apps. A failure to raise capital could have a “chilling effect” on innovation by leaving those startups unable to compete and their talent more likely to be poached by larger tech firms, X warns.

Apple and OpenAI appear to have already made that calculation, X’s filing alleges, by accepting that their deal would likely cost both of them money in the near term. According to Musk’s complaint, OpenAI even provided the software for ChatGPT to Apple for free, essentially paying Apple to work with it on the deal. Apple, for its part, would be unlikely to make any profit from the Siri integration for years.