xAI Files Lawsuit Against Apple and OpenAI Over Alleged Market Collusion

xAI has filed a lawsuit against Apple and OpenAI, alleging trademark infringement and accusing the two companies of collusion in anti-competitive markets.

Elon Musk’s AI company, xAI, has begun a legal battle with Apple and OpenAI, accusing them of cooperating to thwart rivalry in the AI market for apps. The lawsuit asserts that both companies engaged in a strategy designed to stop new competitors such as xAI from gaining momentum.

Musk Alleges Apple’s Unfair App Store Practices

The argument grew more heated following the introduction of the xAI’s Grok 4 model, which Musk asserts Apple deliberately impeded by restricting advertising for the Grok application within its App Store despite its increasing popularity.

Musk tweeted:

“Apple is behaving in a manner that makes it impossible for any AI company besides OpenAI to reach #1 in the App Store, which is an unequivocal antitrust violation. xAI will take immediate legal action.”

Claims Contradicted by Market Reality

Musk’s claim has been widely questioned (and was even mentioned in a Community Note on Elon’s X post). Many AI apps, such as Perplexity, DeepSeek, and Meta AI, have reached the top spot in the App Store, thereby proving the notion that Apple prefers OpenAI specifically.

However, xAI has launched legal action on this basis, accusing Apple as well as OpenAI have:

“locked up markets to maintain their monopolies and prevent innovators like X and xAI from competing.”

The Apple-OpenAI Partnership in the Spotlight

xAI refers to Apple’s agreement with OpenAI that was signed at the end of last year, which combines ChatGPT functions across Apple’s iPhones as well as iPads and Mac devices, pointing to it as the primary reason for Apple’s allegations of market manipulation.

“If not for its exclusive deal with OpenAI, Apple would have no reason to refrain from more prominently featuring the X app and the Grok app in its App Store.”

Legal Risks and Potential Fallout for Musk

In addition to the very low chance of the legal action succeeding, it may be a way to expose Musk to scrutiny by Apple. Apple may be able to look into the legality of Musk’s applications, particularly in light of recent controversy–like AI-based NSFW companions on Twitter (X) and Grok’s recently reported outbursts of racism, which could infringe App Store content guidelines.

Musk’s previous battles with Apple about app store prices were quickly resolved after Apple warned of possible consequences. Musk is no stranger to considering the potential dangers.

Even though the lawsuit seems ill-founded and prone to being challenged, Musk’s litigation against OpenAI and Apple may serve several objectives: generating attention for his business ventures, creating costly obstacles for competitors and potentially halting the growth of their businesses.

Elon’s persistent animus toward OpenAI, particularly after being rejected as CEO at the beginning of its existence, seems to fuel these constant legal battles.

Bottom Line

In the end, although xAI’s lawsuit may not be successful based on the current evidence, it is an expression of Elon Musk’s overall lawfare approach to market rivalry, which involves leveraging legal disputes as a method for publicity and disruption in the highly competitive AI market.