Elon Musk has taken his public dispute with Apple and OpenAI to court, filing a lawsuit on Monday that accuses the two companies of conspiring to cement monopolies in the rapidly growing AI chatbot market. The suit comes just weeks after Musk publicly complained that Apple has been consistently promoting OpenAI’s ChatGPT while his own chatbot Grok has been notably absent from the App Store’s “Must Have” list.

Filed on behalf of Musk’s companies X and xAI, the lawsuit goes well beyond gripes over App Store rankings, however. It alleges Apple and OpenAI have an exclusive deal not only giving ChatGPT unprecedented access to iPhone features, but also blocking rivals from reaching Apple’s user base. Musk’s suit claims the arrangement violates antitrust and unfair competition laws and threatens his companies’ long-promised plans to build an “everything app” on the foundation of Twitter, which he acquired in 2022.

The complaint, filed in federal court in California, says Apple integrated ChatGPT into iOS and made it the default chatbot across Siri, Apple’s Writing Tools, and other features. That gave OpenAI exclusive access to billions of user prompts, which X argues is critical for training and improving chatbot models. Rivals like Grok can’t scale without it, X alleges, and the filing estimates OpenAI already controls at least 80 percent of the chatbot market that will continue to grow with Apple’s integration.

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

Apple has deepened Grok’s disadvantage by “manipulating App Store rankings, intentionally misrepresenting aspects of the integration process, and repeatedly delaying App Store updates to Grok and the X app,” the complaint continues.

The exclusive deal with OpenAI, which X also compares to Apple’s longstanding search engine agreement with Google, could not come at a worse time for Musk, according to the suit. The filing notes Musk has long planned for X to serve as the “digital layer” of an “everything app” atop Twitter that could eventually compete with iPhones as users’ all-in-one super app, and that’s dependent on rival chatbots being able to integrate with iOS.

X contends Apple is motivated by fears a successful rival super app would make iPhones less essential. That’s similar to how WeChat in China has become a one-stop replacement for many standalone smartphone functions, which could appeal to iPhone users too if competition is fair, X’s filing suggests. The complaint even cites an Apple executive Eddy Cue allegedly expressing concern advances in AI could “destroy Apple’s smartphone business.”

Musk’s filing paints the OpenAI deal as a desperate bid by Apple to preserve its iPhone monopoly by tying the future of generative AI to its closed iPhone platform. In the process, X’s suit argues, OpenAI is helping to build an unbeatable lead in generative AI.

Exclusive Access, Growing Market Share

Apple’s close relationship with OpenAI in chatbot development mirrors its 27-year search engine deal with Google, the complaint points out. U.S. regulators have made the case the latter deal helped entrench Google’s monopoly. Musk’s suit similarly accuses Apple of rejecting repeated requests by xAI to integrate Grok with iOS in the same way it did for ChatGPT, even refusing to feature Grok in the App Store despite requests during the launch of a new “Imagine” feature.

In addition to blocking the integration, the filing claims Apple “manipulated” App Store rankings and delayed Grok updates to hobble competition. At stake, Musk’s suit argues, is not only Grok’s ability to compete but the future of AI-driven platforms. The lawsuit notes Siri already handled 1.5 billion user requests per day across the globe in 2024—a volume greater than the total prompts for all generative AI chatbots that year.

If OpenAI is the sole beneficiary of those prompts, the lawsuit says, it will control as much as 55 percent of all potential chatbot interactions. That would give OpenAI a critical advantage not just today but in the years ahead, X’s filing argues. The deal could give Apple and OpenAI an insurmountable lead that blocks innovation from smaller players, similar to how Apple’s longstanding deal with Google cemented a duopoly in online search.

The filing suggests the deal’s consequences could be significant for consumers too. It says Apple customers may end up with fewer choices and less capable chatbots, while also paying monopoly prices for iPhones. Meanwhile, OpenAI could use its dominant market position to hike subscription prices for its ChatGPT “plus” service with little fear of a price war. The company reportedly plans to double that revenue over the next four years, an effort that “would be unfeasible unless OpenAI has power over marketwide prices,” the lawsuit says.

Investment, Rival Startups Could Suffer

Musk also cites potential “deadweight losses” in investment and startups if Apple and OpenAI are left to press their “thumb firmly on the scale” for ChatGPT and against competitors like Grok. The suit says investors will be less likely to back a rival if they know Apple will slam the door on its iOS integration and choose OpenAI’s chatbot by default.

A dearth of funding and resources will then make it harder for talent to scale startups or be developed by smaller players at all, X argues, before talent is “sucked up” by Big Tech. It’s an especially high risk for an industry still in its infancy, with chatbot models and features being developed on a daily basis.

Apple and OpenAI view the chatbot deal as worth more than direct revenue, Musk’s lawsuit also alleges. The complaint says OpenAI provided ChatGPT to Apple for free, in essence paying for its own partnership and subsidizing Apple, while the iPhone maker expects no profit from the deal in the next few years.