Two of Elon Musk's companies, X and xAI, have filed a lawsuit against tech giants Apple and OpenAI, claiming that they are involved in an anticompetitive scheme that hampers market competition. According to Business Insider, the lawsuit accuses Apple and OpenAI of maintaining their smartphone and generative AI chatbot market monopolies by preventing rival technology firms from competing effectively.
The legal action, filed in a Texas federal court on Monday, alleges that the partnership between Apple and OpenAI primarily aims to lock up markets and protect their dominant positions. "Working in tandem, Defendants Apple and OpenAI have locked up markets to maintain their monopolies and prevent innovators like X and xAI from competing," the lawsuit reads. xAI operates Grok, a chatbot that, the suit claims, has been significantly disadvantaged by these anticompetitive behaviors. Amidst the legal fray, OpenAI responded quickly to the suit, criticizing the filing. "This latest filing is consistent with Mr Musk's ongoing pattern of harassment", an OpenAI spokesperson told Business Insider.
Apple, on the other hand, has not issued an immediate comment regarding the lawsuit but previously addressed App Store policies, claiming they are impartial and designed free of bias. TechCrunch noted the lawsuit refers to Apple's collaboration with OpenAI to integrate ChatGPT into its systems, which was announced last June and targets features to be shipped in December. "In a desperate bid to protect its smartphone monopoly, Apple has joined forces with the company that most benefits from inhibiting competition and innovation in AI: OpenAI, a monopolist in the market for generative AI chatbots," the lawsuit states, referring to Apple's plans directly. The full text of the legal allegations can be found on TechCrunch.
The lawsuit also suggests that Apple is actively trying to prevent more advanced AI applications from usurping iPhone's standard functionalities, potentially leading users to opt for more affordable phones. According to the lawsuit, "As this becomes true for more and more categories of functionality, it begins to erode Apple's value proposition that it is worth spending up to $1,599 on an iPhone when a user could access his or her preferred generative AI chatbot through some less expensive option." Furthermore, the legal document obtained by Business Insider indicates that Grok has struggled to surpass a few percent of the market share, a situation allegedly attributable to the anticompetitive measures of Apple and OpenAI.
The ongoing dispute extends beyond the current legal bout. Musk has pursued various avenues to challenge OpenAI, including a prior lawsuit accusing Sam Altman, CEO of OpenAI, of betraying the organization's initial mission as a non-profit entity. He has also publicly criticized Apple's App Store practices, labeling them an "unequivocal antitrust violation" and threatening legal action. Meanwhile, individuals close to the matter told Business Insider that Apple has shown interest in potentially integrating other AI technologies, such as Google Gemini, into its systems at some point.
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