Dallas, Texas — A federal lawsuit filed on Monday by X Corp. and X.AI LLC is challenging what they describe as an anticompetitive partnership between Apple and OpenAI concerning the exclusive integration of ChatGPT. The plaintiffs allege that this collaboration infringes upon federal competition regulations and fortifies monopolistic practices in both companies’ markets.
The lawsuit identifies Apple and OpenAI as maintaining substantial market shares — Apple commands about 65 percent of the U.S. smartphone market, while OpenAI holds nearly 80 percent in the generative AI chatbot sector. By leveraging their dominance, the plaintiffs argue that these companies are unlawfully restricting trade and suppressing competition, thus violating provisions under the Sherman Act.
Filed in the U.S. District Court for the Northern District of Texas, the complaint raises several claims based on antitrust violations, specifically referencing Section 1 of the Sherman Act. This section addresses unlawful trade restraints, asserting that Apple and OpenAI have engaged in actions that stifle market competition. Additionally, the plaintiffs underscore a conspiracy to monopolize their respective sectors, in violation of Section 2 of the same act.
X.AI’s accusations extend beyond federal antitrust violations to include claims under the Texas Business and Commerce Code, which prohibits agreements that restrain trade. They allege that Apple has strategically deprioritized the X.AI app, Grok, in its app store rankings and has delayed approval for updates while favoring ChatGPT, further highlighting the perceived bias in the marketplace.
The lawsuit uses the 2001 landmark case United States v. Microsoft Corp. as a precedent, where Microsoft was found guilty of monopolistic practices due to its overwhelming share in PC operating systems and exclusive dealings with internet service providers. This historical context emphasizes the potential implications of the suit for both Apple and OpenAI.
In addition to seeking a permanent injunction that would prevent the alleged anticompetitive behavior, the plaintiffs are asking for treble damages, which could amount to billions of dollars. They face the challenge of demonstrating specific antitrust injuries and that their damages stem from fewer competitors rather than typical business rivalry.
OpenAI’s ChatGPT, which launched in November 2022, quickly captured a significant share of the burgeoning generative AI market. A partnership announced in June 2024 between OpenAI and Apple designated ChatGPT as the exclusive AI chatbot for Apple’s iOS ecosystem, integrating it with Siri and various iPhone functionalities.
X.AI operates as a subsidiary of Elon Musk’s X Corp., the owner of the platform formerly known as Twitter. The company is primarily known for its chatbot Grok, which competes directly with ChatGPT.
The lawsuit emerges amid other notable controversies in the tech industry, including Apple’s ongoing disputes regarding data access mandates from the United Kingdom and a class action lawsuit against OpenAI by one of its major competitors, Anthropic, concerning alleged use of copyrighted material.
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