The US AI war over artificial intelligence is escalating: Why Musk (xAI/Grok) accuses Apple and OpenAI of an AI monopoly

### Grok on the sidelines? This is what's really behind Musk's angry lawsuit against Apple ### Your iPhone in the crosshairs: What Musk's lawsuit against Apple means for all users ### More than just business: Is Musk's lawsuit the culmination of his personal feud with OpenAI? ###

“Conspiracy to restrict competition”: The explosive allegations in Musk’s lawsuit against Apple and OpenAI

A legal earthquake is shaking Silicon Valley and threatening to reshape the balance of power in the future market of artificial intelligence. Tech visionary Elon Musk and his company xAI have filed a far-reaching lawsuit against two of the world's most powerful corporations: Apple and OpenAI. The accusations are serious: conspiracy to restrict competition and the abusive establishment of a monopoly-like position.

At the heart of the conflict is the strategic partnership announced in June 2024, which deeply integrates OpenAI's ChatGPT into Apple's operating systems such as iOS, giving the chatbot direct access to hundreds of millions of users – a potentially unassailable advantage. Musk argues that this is a direct attack on his own AI chatbot, Grok, which he claims is systematically excluded from competition and hampered in its development. But there is more to the lawsuit than just frustration over market share. It is a fundamental power struggle for control over a revolutionary technology, in which personal feuds, multi-billion dollar business interests, and the fundamental vision for the future of AI collide. This titanic battle could not only decide the fate of individual companies but also shape the technological landscape for years to come.

Background of the lawsuit

What leads a tech billionaire like Elon Musk to take two of the world's most powerful technology companies to court? The answer lies in the complex power structures of the artificial intelligence industry and Musk's frustration with the market position of his own AI chatbot, Grok.

In August 2025, Musk's company xAI filed a comprehensive lawsuit in a U.S. federal court in Texas targeting both Apple and OpenAI. The core allegation is "conspiracy to restrict competition in the field of artificial intelligence." Specifically, xAI claims that Apple systematically discriminates against other chatbots to give ChatGPT an unfair advantage.

The lawsuit accuses both companies of "closing off markets to maintain their monopolies and prevent innovators like X and xAI from competing." These allegations go far beyond simple business practices and touch on fundamental questions of market power in the rapidly evolving AI landscape.

The strategic partnership between Apple and OpenAI

What collaboration is at the heart of the allegations? Apple and OpenAI announced a far-reaching partnership in June 2024 that integrates ChatGPT directly into Apple's iOS, iPadOS, and macOS operating systems. This collaboration, advertised as "Apple Intelligence," allows iPhone users to submit queries directly to ChatGPT without having to switch between different applications.

The partnership goes beyond simple app integration. ChatGPT will be deeply embedded in Siri, allowing users to ask more complex queries that exceed Apple's own AI capabilities. Additionally, ChatGPT will be integrated into Apple's system-wide writing tools to assist users with content creation.

Apple emphasizes that this integration is subject to strict privacy regulations. User requests are not stored by OpenAI, and IP addresses are masked. Despite these privacy safeguards, Musk sees the partnership as an existential threat to competing AI providers.

Musk's monopoly allegations in detail

What are the legal grounds for Musk's allegations? The lawsuit argues that Apple, with a 65 percent market share in the US smartphone market, holds a monopoly. At the same time, OpenAI is accused of controlling a monopoly with an 80 percent market share in AI chatbots.

According to xAI, this market dominance forms the basis for anticompetitive behavior. The lawsuit alleges that Apple's exclusive agreement with OpenAI systematically excludes other AI chatbots from valuable user interactions. This exclusion makes it more difficult for competitors like Grok to improve their software through machine learning, while OpenAI benefits from billions of user queries.

A particularly contentious issue is Apple's alleged manipulation of App Store rankings. Musk claims that despite one million reviews with an average of 4.9 stars for Grok, Apple refuses to mention the app in relevant lists. This would suggest that Apple is actively suppressing the visibility of competing AI applications.

Grok's market position compared to ChatGPT

How does Grok actually compete with ChatGPT? The numbers reveal a clear imbalance in market dominance. ChatGPT commands a dominant position, with approximately 62.5 percent of the consumer AI market. In September 2024, ChatGPT recorded an astonishing 3 billion visits, surpassing even popular platforms like TikTok and Bing.

Grok, on the other hand, is struggling for market share, despite making remarkable progress. From 1.2 million users in September 2024, the platform grew to 25.82 million visitors in February 2025, representing an increase of over 24.6 million visits in just five months. By June 2025, the number of users stabilized at 18.8 million monthly active users.

Despite these growth rates, Grok lags far behind ChatGPT. While ChatGPT boasts over 200 million weekly active users, Grok has approximately 35.1 million monthly active users. This discrepancy underscores the challenges xAI faces in competing with the established market leader.

The financial dimensions of the AI ​​war

What economic interests are behind this legal dispute? The financial stakes in the AI ​​industry are enormous. xAI recorded impressive revenue jumps: from approximately $100 million at the end of 2024 to an estimated $3.2 billion in annualized revenue in July 2025. Following the integration of xAI as X's parent company in March 2025, revenue growth accelerated significantly.

xAI's revenue streams are diverse and include X advertising, X Premium subscriptions, consumer Grok subscriptions both on and off X, and xAI's usage-based API. The company also introduced expensive subscription plans, including SuperGrok Heavy for $300 per month, which is significantly more expensive than offerings from competitors like OpenAI, Google, and Anthropic.

OpenAI, for its part, has underpinned its market leadership with massive investments. The company raised $40 billion in the first quarter of 2025, a sixfold increase over the previous quarter. This capital infusion enables OpenAI to outperform competitors in infrastructure investments, including the $50-100 billion Stargate data center project.

Apple's smartphone monopoly under legal consideration

How valid are the monopoly allegations against Apple? The question of market definition is at the heart of the legal dispute. The U.S. Department of Justice filed a comprehensive antitrust lawsuit against Apple in 2024, arguing that the company controls over 70 percent of the U.S. smartphone market, measured by revenue.

Apple disputes this assessment, arguing that the relevant reference point should be the global smartphone market, where Apple's market share is only approximately 23 percent. This discrepancy between domestic and global market shares could be crucial to the outcome of the litigation.

A federal judge in New Jersey has already ruled that allegations against Apple regarding monopolistic practices in the US smartphone market may be justified. The court found that Apple's alleged 65 to 70 percent market share, combined with significant barriers to entry such as high switching costs and technical limitations, could support monopolistic power.

The historic feud between Musk and OpenAI

What personal and business conflicts underlie this dispute? The tensions between Musk and OpenAI date back to the company's beginnings. Musk co-founded OpenAI in 2015 but left the company in 2018 due to disagreements over its strategic direction.

The central point of contention was OpenAI's transformation from a non-profit organization to a for-profit company. Musk claims he invested under the assumption that OpenAI would remain a non-profit organization serving humanity. He viewed the subsequent partnership with Microsoft and transformation into a for-profit company as a betrayal of the original mission.

These personal animosities have escalated over the years. Musk called OpenAI CEO Sam Altman "Scam Altman," while Altman described Musk as "not a happy person." The legal disputes between the two have evolved into a complex web of lawsuits, countersuits, and public accusations.

Technical innovations and competitive dynamics

What technological differences shape the competition between Grok and ChatGPT? Grok differs from ChatGPT in its direct access to real-time data from X (formerly Twitter) and its distinctive personality, which emphasizes humor and a "rebellious charm." These qualities are intended to distinguish Grok from ChatGPT's more neutral and professional approach.

ChatGPT, on the other hand, scores highly with its versatility, professional usability, and multimodal capabilities. The platform offers a broader range of use cases, from content creation to customer support and education. OpenAI has also continuously introduced new features, such as GPT 4 integration and multimodal capabilities, keeping ChatGPT at the forefront of technological innovation.

The latest version, Grok 4, launched in July 2025, resulted in a dramatic 279 percent increase in downloads and a 325 percent jump in revenue to $419,000. This demonstrates that innovative AI models can have a significant impact on consumer interest and spending.

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Antitrust challenges and market definition

How complex are the antitrust aspects of this case? Determining the relevant market is a key aspect of any antitrust lawsuit. Apple can argue that the relevant market is broader than the "performance smartphone" market claimed by the U.S. Department of Justice, which excludes entry-level smartphones.

The government defines two specific markets: the general smartphone market in the US, where Apple allegedly holds 65 percent, and the narrower "performance smartphone" submarket with 70 percent. These market definitions are crucial because they form the basis for the monopoly allegations.

Antitrust experts are closely watching the case, as it represents a significant opportunity for U.S. courts to assess the existence of a defined market for AI and its potential parameters. Professor Christine Bartholomew of the Buffalo School of Law called the case a "canary in the coal mine" regarding the judicial response to AI and the intersection of antitrust and AI.

Impact on the future of the AI ​​industry

What does this legal dispute mean for the development of the AI ​​industry? The lawsuit could have far-reaching consequences for the way tech giants integrate and market AI technologies. If Musk is successful, it could lead to stricter regulation of AI partnerships and a more equal distribution of market opportunities.

The case could also set precedents for future antitrust litigation in the AI ​​industry. With the generative AI industry, valued at $3.88 billion in 2023 and expected to grow to $38.6 billion by 2028, enormous economic interests are at stake.

The integration of AI into existing platforms is likely to remain a contentious issue as companies seek to strengthen their market position while regulators strive to ensure fair competition. The decision in this case could set the tone for the entire industry.

Data protection and user rights in AI competition

What role do privacy considerations play in this competitive conflict? Apple has made significant efforts to emphasize the privacy aspects of its ChatGPT integration. The company assures that user requests are not stored by OpenAI and that IP addresses are masked.

This privacy-focused approach could be seen as a competitive advantage over other AI providers that may have less stringent data protection measures. Apple also allows external parties to conduct regular and independent audits of its cloud systems to increase confidence in its data protection commitments.

For consumers, this means that choosing between different AI platforms is based not only on functionality and usability, but also on privacy and transparency. These considerations could become increasingly important as AI technology becomes more deeply integrated into everyday applications.

Economic consequences and claims for damages

What financial consequences could this lawsuit have? In addition to a ban on the current Apple-OpenAI collaboration, xAI is also seeking billions of dollars in damages. The lawsuit claims that the exclusive agreement between Apple and OpenAI has caused billions of dollars in damages to xAI and other competitors.

The economic impact goes beyond direct damages. If the lawsuit is successful, it could force Apple to change its App Store practices and grant other AI chatbots equal access. This could have significant implications for Apple's business model and revenue streams.

For OpenAI, an unfavorable outcome of the lawsuit could mean limiting or terminating its valuable partnership with Apple. This would jeopardize access to hundreds of millions of iPhone users and significantly impact ChatGPT's growth.

The defendants’ answers

How are Apple and OpenAI responding to these serious allegations? Apple has already stated, following Musk's initial threat of legal action, that its App Store is designed to be fair and not favor anyone. The company emphasizes that it presents thousands of apps through charts, algorithmic recommendations, and curated lists selected by experts based on objective criteria.

Apple also argues that its partnership with OpenAI is not exclusive and that, over time, other AI chatbots could be integrated in a similar way. The company insists that users are not prevented from using other chatbots like Grok, and that nothing in Apple's operating system prevents iPhone users from using alternative AI services.

OpenAI has sharply criticized the lawsuit, calling it part of "Mr. Musk's ongoing pattern of harassment." The company argues that Musk is trying to win through legal tactics what he cannot achieve through developing better products.

Impact on the X platform and the “Everything App” concept

What role does Musk's vision of an "everything app" play in this legal dispute? The lawsuit reveals that Musk isn't just fighting for downloads for Grok, but that he fears Apple and OpenAI are conspiring to thwart his ambitions for an "everything app," which motivated his acquisition of Twitter.

According to the lawsuit, Apple is allegedly so concerned that X could use Grok to develop a "super-app" that could render advanced smartphones obsolete that it decided to cooperate with OpenAI to suppress innovations from X and xAI. This claim demonstrates how closely intertwined Musk's various business interests are.

The lawsuit also alleges that the damages to xAI and its generative AI chatbot Grok also harm X's "Everything App." Because Grok's functionality is a core feature of the X app, the better Grok performs, the more attractive the X app becomes. The defendants' alleged conduct makes Grok less competitive with ChatGPT, ultimately causing X to see fewer customers, subscriptions, and revenue.

International perspectives and regulatory approaches

How do international regulators view similar competition issues? The European Union has already taken steps to limit the market power of large technology companies. The European Commission imposed a $1.95 million fine on Apple, demonstrating that international regulators also have concerns about Apple's business practices.

In other markets, such as China, where super apps like WeChat thrive, concerns about AI monopolies may carry less weight. The lawsuit refers to Apple executive Eddy Cue, who allegedly "raised concerns that AI could threaten Apple's smartphone business" based on trends in international markets where super apps are successful.

This international dimension shows that the impact of the litigation could extend far beyond US borders, potentially influencing global standards for AI integration and competition.

Technological innovation versus market power

What balance should exist between technological innovation and market power? The case raises fundamental questions about the role of market power in promoting or hindering technological innovation. Apple argues that its integration of AI technologies represents product differentiation and integration, not competitive exclusion.

Musk, on the other hand, claims that market power is used to stifle innovation and keep smaller competitors out of the market. This tension between companies' right to integrate and differentiate their products and the need to maintain fair competition is at the heart of many modern antitrust debates.

The decision on whether Apple's conduct constitutes a legitimate business strategy or anticompetitive behavior could set precedents for future technology integrations. This is especially important as AI technologies are increasingly integrated into a wide variety of products and services.

Long-term impact on the AI ​​market

What could the long-term consequences of this litigation be for the AI ​​industry? Regardless of the outcome, the lawsuit has already raised important questions about market structure and competition in the AI ​​industry. The lawsuit could lead to regulators taking a closer look at how large technology companies enter into AI partnerships and treat smaller competitors.

For consumers, this could lead to more choice and potentially lower prices for AI services. If courts find current practices anticompetitive, companies could be forced to create more open platforms that provide equal access to different AI providers.

The development of the AI ​​industry will likely continue to be characterized by a tension between innovation and regulation. While companies seek to gain competitive advantages through technological breakthroughs, regulators will seek to ensure that these advantages do not come at the expense of fair competition.

The power struggle between Musk, Apple, and OpenAI is therefore more than just a business dispute—it could significantly impact the future of artificial intelligence and its integration into our daily lives. The courts' decision will likely have far-reaching implications for the entire technology industry, potentially setting new standards for competition and innovation in the AI ​​era.

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