Elon Musk-owned xAI on Monday sued tech giants Apple and OpenAI over an alleged scheme to illegally dominate the artificial intelligence industry through a collaboration that equipped iPhones with AI tools.
The exclusive agreement between the world’s largest smartphone producer and a top AI firm effectively shut other AI companies out of an opportunity to reach tens of millions of customers, according to the lawsuit filed in a Texas federal court.
“This is a tale of two monopolists joining forces to ensure their continued dominance in a world rapidly driven by the most powerful technology humanity has ever created: artificial intelligence,” the lawsuit says.
The lawsuit aims to “stop Defendants from perpetrating their anticompetitive scheme and to recover billions in damages,” according to the filing.
Last year, Apple unveiled a set of customizable tools that rely on generative AI, including a language feature that summarizes messages as well as an image generator. The product rollout marked the culmination of an agreement between Apple and OpenAI, the companies said.
The AI capability, called Apple Intelligence, amounted to the “next big step for Apple,” CEO Tim Cook said in June of 2024.
According to the lawsuit, the integration of OpenAI technology into the operating system of the iPhone left users without the ability to access AI products from other firms, such as xAI. In turn, the flood of user activity enjoyed by OpenAI gave the company valuable data with which to improve its products, the lawsuit says.
“More users beget more prompts, and more prompts offer more opportunities to train the model, whose better features then attract even more users,” the lawsuit says.
Apple CEO Tim Cook speaks in the Oval Office of the White House in Washington, August 6, 2025.
Brendan Smialowski/AFP via Getty Images
In a separate lawsuit, Musk is suing OpenAI over an alleged betrayal of the company’s founding mission in a sprint toward profits. Musk, the world’s richest person, co-founded OpenAI but left the company in 2018.
In a blog post last year, OpenAI rebutted Musk’s claims, saying the firm had realized that a for-profit entity would be necessary to acquire the resources to develop high-powered AI in accordance with its mission.
In a statement to ABC News on Monday, OpenAI rebuked Musk’s new lawsuit.
“This latest filing is consistent with Mr. Musk’s ongoing pattern of harassment,” the company said.
Apple did not immediately respond to ABC News’ request for comment.
In 2023, Musk launched xAI, vowing to develop a competitor with established offerings like ChatGPT. Within months, the company launched a chatbot called Grok, which can respond to prompts from users of Musk-owned social media platform X.