Tesla CEO Elon Musk took legal action in a growing spat with Apple and OpenAI on Monday, suing the two companies for anti-competitive behavior around ChatGPT. Filed on behalf of Musk’s companies X (Twitter) and xAI, the lawsuit claims Apple and OpenAI colluded to entrench their respective monopolies in the AI chatbot market.

The suit comes after weeks of Musk publicly lambasting Apple for giving preferential treatment to OpenAI, while his own chatbot, Grok, was not featured on the App Store’s “Must Have” list. But the new filing goes well beyond App Store rankings, accusing Apple and OpenAI of entering an exclusive agreement that prioritizes ChatGPT while actively locking out rivals from access to Apple’s user base.

Musk’s complaint claims the arrangement violates antitrust and unfair competition laws. If allowed to continue, it could “destroy or unreasonably retard” Musk’s plans for building an “everything app” on top of X, which he acquired in 2022. The company is seeking billions in damages, plus a permanent injunction against Apple’s exclusive integration of ChatGPT.

The lawsuit notes Apple has integrated ChatGPT into iOS as the default chatbot for Siri, the company’s Writing Tools, and more. That exclusive access to Apple users means OpenAI is in control of billions of potential user prompts to train on, and the filing argues, data is critical to scaling and improving chatbot services. X’s own chatbot, Grok, it argues, simply cannot compete. “As a result of the exclusive deal, OpenAI is on a path to control at least 80 percent of the chatbot market share,” the lawsuit states.

Apple could have facilitated integration from multiple chatbots, “yet it chose to enter an exclusive deal with OpenAI,” the complaint reads. “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.”

Apple is also portrayed as being driven by fears that a rival could build a similarly “sticky” super app to that of WeChat in China, which has become an all-in-one messaging, payments, social media, and more service, displacing standalone apps. The lawsuit alleges that Apple executive Eddy Cue expressed a fear that “AI is going to destroy Apple’s smartphone business.” Musk’s legal filing characterizes Apple’s deal with OpenAI as a “desperate move to protect Apple’s own iPhone monopoly, while at the same time helping to give OpenAI an insurmountable lead in generative AI.”

Chatbot Competition Compared to Search

The complaint notes that the deal between Apple and OpenAI is similar to Apple’s own deal with Google to have its search engine default on iOS. U.S. regulators have in the past argued that this deal cemented Google’s monopoly in search. The lawsuit further alleges that Apple rebuffed multiple requests from xAI to integrate Grok with iOS, and even refused to feature Grok in the App Store “on repeated occasions, including on the day of the Imagine launch.” Beyond that, the lawsuit also accuses Apple of manipulating App Store rankings and delaying Grok updates.

At stake is not just whether Grok can fairly compete, the lawsuit argues, but the very nature of the AI platform experience going forward. It notes that Siri received 1.5 billion user requests per day globally in 2024, more than the total number of prompts to all generative AI chatbots combined that year. If all of that user data is solely available to OpenAI, it effectively owns a 55 percent share of all potential AI chatbot interactions, X argues.

The deal could have significant consequences for consumers, the filing warns. Apple customers could face less competition and reduced choice, leading to less capable AI chatbots and higher monopoly prices for iPhones. Meanwhile, OpenAI’s market dominance could let it raise subscription prices, with the company planning 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 alleges.

Musk’s suit also accuses Apple of discouraging investment in other chatbot companies. If Apple continues to give ChatGPT preferential access to the iPhone user base, other companies have less incentive to invest in chatbots, which are needed to provide resources for competing services to scale and innovate. X further alleges that the reduced investment and opportunity to grow will lead to brain drain as Big Tech companies acquire the best developers and talent from underfunded startups.

The lawsuit also highlights that the OpenAI-Apple deal doesn’t make financial sense for either company. According to Musk’s filing, OpenAI is providing ChatGPT to Apple free of charge, in effect paying Apple to enter the exclusive deal. And Apple’s main gain is having OpenAI commit not to offer alternatives on iOS, with no near-term profit to the company from the exclusive arrangement. “The reason is obvious: It’s more valuable to both Apple and OpenAI to block other chatbots,” the lawsuit states.

It is in both Apple’s and OpenAI’s interest to maintain exclusive access to users and user data, as that grants them greater market power, which in turn lets both charge more for their own products. Apple has made it very clear that it has no intention of changing course,” an OpenAI spokesperson told Ars Technica. Apple declined to comment.

The outcome of Musk’s legal battle may have significant ramifications for AI. A decision against Musk would validate Apple and OpenAI’s use of their market power to entrench market position, determining the terms of competition in AI moving forward.