X Corp, the parent company of Elon Musk’s social media platform X, along with its artificial intelligence arm xAI, have filed an antitrust lawsuit against Apple and OpenAI [X Corp v. Apple and Open AI]..The suit alleges that the two technology giants colluded to lock up the smartphone and generative AI chatbot markets, foreclosing competition and stifling innovation..Filed before the United States District Court for the Northern District of Texas, the suit casts the dispute as “a tale of two monopolists” — Apple with its 65% market share in US smartphones and OpenAI with what plaintiffs claim is over 80% of the generative AI chatbot market through ChatGPT. By joining forces, X and xAI allege that the defendants cemented their dominance at the expense of rival products such as xAI’s Grok, which despite positive reviews and millions of downloads has failed to gain more than a sliver of the market..According to X, Apple fell behind in AI innovation after focusing too narrowly on incremental changes to the iPhone. Internal concerns within Apple, including statements from its Senior Vice President Eddy Cue, warned that generative AI could eventually make iPhones irrelevant — just as Apple’s iPhone once destroyed Nokia’s handset business.OpenAI, meanwhile, quickly rose to global prominence after launching ChatGPT in 2022, amassing hundreds of millions of users. The suit accuses OpenAI of exploiting scale advantages and network effects to entrench its monopoly, while abandoning its original nonprofit mission of developing AI to “benefit humanity.” It highlights a series of controversies, including employee resignations over safety concerns and ongoing investigations by the Federal Trade Commission..The heart of the lawsuit is Apple’s June 2024 announcement that it would integrate ChatGPT directly into iOS. This made OpenAI’s chatbot the only generative AI tool available natively through Siri, Apple’s Writing Tools and the iPhone camera application. Users wanting AI-assisted responses have no option but to rely on ChatGPT, even if they prefer alternatives like Grok or Anthropic’s Claude.The suit stresses that there was no technical reason to limit iPhone integration to ChatGPT alone. Other chatbots, it notes, provide APIs that could easily connect to Siri and Apple’s systems. “Any benefits to users…could have been accomplished without providing exclusivity to OpenAI’s ChatGPT,” the filing says..Beyond the integration deal, the plaintiffs accuse Apple of further protecting its monopoly by manipulating its App Store. The lawsuit highlights how the Grok app and the X app - both ranked highly in subject-specific “Top Apps” charts - were excluded from the “Must-Have Apps” section, while ChatGPT was prominently featured. Apple is also accused of dragging out approval processes for Grok updates and rejecting requests for promotional features.Such conduct, the plaintiffs argue, has deprived Grok of scale — the critical driver of quality improvements for generative AI chatbots. More users mean more prompts, which in turn allow models to learn and improve. By channeling iPhone-originated prompts exclusively to ChatGPT, Apple and OpenAI allegedly created a self-reinforcing cycle that leaves rivals unable to catch up..The lawsuit frames the alleged collusion as harmful not only to competitors, but also to consumers. Without Apple and OpenAI’s scheme, it argues, smartphone users would enjoy lower prices, greater choice and faster innovation. Instead, they are locked into Apple’s hardware ecosystem and OpenAI’s chatbot.A central theme is the threat posed by AI-powered “super apps” - multifunctional platforms that can handle social connectivity, financial services, shopping and entertainment across devices. X and xAI claim their vision of a super app, powered by Grok, directly threatens Apple’s iPhone business model by reducing dependence on expensive hardware. The company asserts that Apple deliberately blocked this evolution, fearing the erosion of its monopoly rents..X and xAI have sought an injunction barring Apple and OpenAI from continuing what they describe as an unlawful anti-competitive arrangement, alongside claims for damages running into billions of dollars. The plaintiffs argue that absent judicial intervention, Apple and OpenAI will continue to foreclose rivals, weaken innovation and maintain inflated profits..Read Plea
