On August 25, Elon Musk’s xAI filed a bombshell lawsuit against Apple and OpenAI. In broad strokes, the suit alleges that Apple’s 2024 deal with OpenAI to integrate ChatGPT into Siri violates antitrust law. The suit also claims that Apple has taken concrete steps to prevent rival AI apps like xAI’s Grok from succeeding on the App Store. The complaint is impressively written, but not legally persuasive. What’s more, the complaint itself is rife with contradictions, hypocrisy, and strongly suggests that the impetus behind Musk’s lawsuit is largely driven by petulance and his own personal grievances against OpenAI. In short, the lawsuit’s claims are weak and unlikely to have any impact on Apple or OpenAI.
Right off the bat, the suit alleges that Apple’s deal with OpenAI is part of a “desperate bid to protect its smartphone monopoly.” For starters, the claim that Apple has a smartphone monopoly is itself questionable. Apple’s share of the smartphone market in the U.S. is about 60%. Historically, U.S. courts consider a market share over 70% to be evidence of a monopoly. That aside, having a monopoly in and of itself is not illegal. Antitrust laws don’t punish success. Rather, a company runs afoul of the law when it abuses its monopoly power to prevent fair competition. In other words, antitrust is less about market dominance and more about conduct.
Apple’s deal with OpenAI is not unique
The lawsuit claims that Apple and OpenAI struck an agreement to keep competition at bay. This argument rings hollow and ignores the fact that OpenAI’s technology fills a gap in Apple’s software offerings. There’s nothing illegal about striking an exclusive deal with a best-in-class software company, especially when the deal does nothing to prevent rival companies from competing. Indeed, Apple’s deal with OpenAI hasn’t precluded other AI chatbots from topping the App Store charts. DeepSeek, for example, was the top app on the App Store earlier this year. And bear in mind that this was after Apple announced its deal with OpenAI. Grok, meanwhile, has consistently ranked as one of the top free apps on the App Store.
Exclusive agreements don’t inherently stifle competition, no matter how much market share each company has. For instance, Apple has a deal with Google to make it the default search engine on iOS. That doesn’t stop Bing or DuckDuckGo from competing. McDonald’s, meanwhile, only serves Coca-Cola products. That doesn’t mean Pepsi has grounds to file a lawsuit.
It’s also quite hypocritical for xAI to bemoan Apple’s exclusive deal with OpenAI when Grok itself is tightly integrated into X and Tesla vehicles. Apparently, it’s permissible for Musk to integrate his own AI software into the products of companies he owns to the detriment of rivals. Meanwhile, Apple integrating third-party software into Siri is supposedly problematic even though users can just as easily download standalone AI apps.
While xAI claims that there is no “valid business reason for the Apple-OpenAI deal to be exclusive,” xAI itself acknowledges ChatGPT’s position as a market share leader. This alone is a valid business reason for the agreement to be exclusive. Further, other chatbots could be integrated into Siri in the near future. In fact, there are rumors Apple is already talking to Google about using Gemini to power Siri.
xAI’s argument also ignores that integrating ChatGPT into Siri requires substantial work to ensure that performance, security, and privacy protections remain at the level Apple demands. For a company that prides itself on releasing products that “just work,” it’s understandable that Apple would rather strike a deal with a market leader than provide a dizzying number of options that might strain Apple’s resources and ultimately provide users with a subpar experience.
Apple’s OpenAI deal doesn’t stifle competition
Antitrust law concerns itself with a loss of alternatives and competitors being excluded from distribution. That’s not what’s going on here. While ChatGPT is the only generative AI chatbot integrated into Siri, there’s nothing stopping users from downloading and using apps like Google Gemini, Claude, and Grok. As long as Apple’s deal with OpenAI doesn’t prevent rivals from competing, there’s nothing illegal about it.
xAI’s complaint itself acknowledges this, as it reads in part: “Although iPhone users can still access other generative AI chatbots on their iPhones by using a web browser or by downloading a particular generative AI chatbot’s app, those options do not provide the same level of functionality, usability, integration, or access to user prompts as ChatGPT’s first-party integration with Apple.”
If anything, ChatGPT’s integration into Siri is clunky and provides less usability than standalone apps. Additionally, if Grok is wildly superior to all other AI chatbots, there’s nothing to prevent users from downloading Grok on the App Store and bypassing Siri altogether.
xAI is upset Apple isn’t actively promoting Grok
One of the more unusual aspects of the lawsuit is the allegation that Grok isn’t listed in the “Must-Have Apps” section of the App Store, even though it’s routinely ranked high in the “Top Apps” chart. This is a childish complaint, to put it mildly. There are undoubtedly hundreds of apps that rank highly that don’t make it into the Must-Have Apps section, which Apple itself curates. If anything, the fact that Grok was able to perform so well in the App Store without being featured in the Must-Have Apps section seems to contradict the claim that Apple is taking steps to keep it and other AI chatbots from succeeding.
Apple is under no legal obligation to promote any app. Apple is free to choose which apps it wants to feature and promote based on what it believes its users will like. It’s also free to promote apps that align with its own ethos. To this end, there’s a simple explanation as to why Apple hasn’t prominently featured Grok. Just last month, Grok started to spew out answers which praised genocidal dictators, while also spreading virulently racist and antisemitic content. This is hardly a point of contention, considering Grok itself said as much on X.
Musk later took to X to explain what happened: “Grok was too compliant to user prompts. Too eager to please and be manipulated, essentially. That is being addressed.” In light of that, why would Apple ever proactively promote or highlight an app that is so easy to manipulate into regurgitating hateful content? Can you imagine the controversy that would ensue if basic Siri queries returned vile and hateful answers? The only obligation Apple has is to let Grok compete on a level playing field. Apple does this, and Grok continues to perform well on the App Store charts.
xAI also complains about typical App Store bureaucracy
The lawsuit also alleges that Apple maintains ChatGPT’s market position by “delaying approvals for updates to the Grok app and by rejecting numerous requests by xAI for the Grok app to be featured in the App Store.” The suit specifically takes issue with the fact that Grok wasn’t a featured app when it introduced new innovations like the “Imagine” feature. Incidentally, the “Imagine” feature at launch featured a “Spicy” mode designed to deliver NSFW content. In turn, it’s not shocking Apple opted not to feature Grok.
xAI’s argument here is rather weak, because Apple is under no obligation to feature any specific app. And as for the App Store red tape, it’s no secret that delayed reviews or rejections of app updates are common and have been part of the developer experience for the entirety of the App Store’s existence. The complaint provides no evidence that Grok updates were treated any differently relative to other apps.
The reality is that Apple applies App Store rules consistently to all developers. This has nothing to do with keeping Grok at bay, but rather seems to be typical enforcement of App Store guidelines.
There’s a high legal bar for antitrust cases
All told, proving an antitrust claim requires an extraordinary amount of proof. xAI would have to demonstrate concrete harm to consumers via metrics like higher prices, reduced competition, and stifled innovation. The complaint fails in this regard and, more than anything, rests on speculative claims. For example, the complaint alleges that Apple’s arrangement with OpenAI discourages innovation.
“Because OpenAI has been able to deprive rivals of scale, the amount of investment and innovation in the industry is lower than it would be but for the unlawful agreement between the two monopolists,” the suit reads in part. “Moreover, ChatGPT’s competitors’ innovative efforts have been stymied because they do not have native integration into iPhones.”
This is a bizarre claim, yet illustrative of the type of arguments laid out in the complaint. The idea that Apple’s agreement with OpenAI is slowing down the pace of innovation ignores reality. Innovation in the AI space is constantly happening at breakneck speed. If anything, it’s hard to keep up with the dizzying number of advancements we see from AI companies on seemingly a weekly basis. The idea that Apple’s deal with OpenAI is doing anything to hinder innovation is not backed up by any credible claims.
Ultimately, Musk’s complaint reads more like a symbolic publicity stunt than a genuine antitrust challenge. In fact, it’s possible the lawsuit might be dismissed before it even gets to the discovery phase. In the interim, we can expect a reply from Apple to come in the next two to three weeks.