Elon Musk has fired off his latest shot in an increasingly public spat with Apple and OpenAI, suing the tech giants on Monday over a deal that allegedly entrenches the companies’ monopolies in a nascent but rapidly growing AI chatbot market. The lawsuit marks the latest step in the saga following Musk’s outspoken critique of Apple last month for what he claimed was biased handling of his new Grok chatbot in the App Store.

Filed in federal court in California on behalf of Musk’s X and xAI, the lawsuit claims Apple and OpenAI “have engaged in a secretive, anticompetitive conspiracy to use their respective market power to maintain and expand their monopolies.” Musk alleges Apple has unlawfully manipulated the App Store rankings, while OpenAI has paid for a “Trojan horse” of access to iPhone features, including defaults across Siri and App Clips, that allows it to rapidly scale ChatGPT.

Musk, who famously first offered to buy Twitter in April 2022 with a pledge to build an “everything app,” describes ChatGPT’s access to iPhone features as an existential threat to Grok and the future of xAI, even as it entrenches OpenAI’s growing market power. As evidence, X points to Apple executive Eddy Cue’s alleged statement that advances in generative AI “could destroy Apple’s smartphone business.”

Apple has effectively “given OpenAI access to Siri, Apple’s Writing Tools, and other services, potentially giving OpenAI direct access to billions of user prompts,” reads the filing. In the lawsuit, X argues that the user data it requires to train, improve, and scale its chatbot would not be available without unfair access to Apple’s billions of users.

X estimates OpenAI already has 80 percent of the market for chatbots. By exclusively integrating with iPhone features, Apple’s move could “lock in ChatGPT’s market share, stifling competition indefinitely.”

“Their conduct prevents fair competition in the market and, unless enjoined, threatens to block X’s ability to compete permanently,” X stated in the lawsuit.

Apple Thwarting Competition

Apple declined to comment for this story, and an OpenAI spokesperson told Ars Technica the lawsuit was “a clear escalation of Elon’s ongoing pattern of harassment against Apple.”

The complaint includes transcripts of Musk’s public back-and-forth with Apple over the past few weeks in which he argued that Apple has given ChatGPT special consideration. In one exchange, Musk tweeted that Apple employees should “applaud their executives for putting us on a level playing field,” without realizing the real prize is monopolizing the market for a technology you know little about.”

The companies alleged that such special consideration has included direct technical integration with iOS features. According to the lawsuit, ChatGPT will be used as a default on Apple’s Siri, in its Writing Tools, in App Clips, and is the default “third-party service” in Find My Messages. Apple is also offering ChatGPT in third-party integration for its iOS default browser Safari, after bowing to pressure from Musk to remove rival Edge. Apple has even agreed to let OpenAI copy all personal user data if it leaves iOS, something Musk has also questioned.

As part of its public critique, Musk and xAI have also questioned the financial terms of the deal, noting that OpenAI reportedly gave Apple access to ChatGPT at no cost, meaning it was effectively paying Apple to make the deal. For its part, Apple has broken even in the previous six years and has no plans to profit from the iPhone any time soon, with Musk’s suit noting Apple does not “anticipate near-term profits from the ChatGPT deal.”

The complaint, meanwhile, draws parallels with Apple’s agreement with Google to make the search engine the default, which regulators argued entrenched the company’s monopoly. Musk argues Apple has rebuffed repeated overtures from xAI to discuss making Grok a default, and also rejected repeated requests to even feature the app in the store and during a launch event for its new “Imagine” integration.

The document further alleges that Apple manipulated the App Store rankings, as well as delayed Grok updates to weaken the app and appease OpenAI.

AI Wars and Chatbot Monopolies

Chatbots are central to the future of generative AI and, Musk says, the smartphone. The filing notes the app store for ChatGPT already has a scale “greater than the total number of prompts sent to all generative AI chatbots in 2024.”

X calculates Siri processed 1.5 billion user prompts a day in 2024, and with Apple’s integration, all those messages “will flow to OpenAI by default, giving it data that rivals do not have.” The number of users making all those prompts, Apple’s existing cash cow market power, and OpenAI’s deal to use Siri and other features give the company “the ability to charge exorbitant prices” to users, the filing states. It also gives OpenAI the ability to raise subscription prices for its own ChatGPT paid tier, with plans to double the monthly price of the “plus” subscription in the next four years.

The lawsuit suggests those dynamics could have larger market-wide consequences. As investment looks to flow into the generative AI space, Musk is also warning that if Apple “continues to press its thumb firmly on the scale on behalf of ChatGPT, they will dampen investment in other companies.” Investors could be more likely to put resources into developing talent and products with the tech giants than in startups, the argument goes. And if the market is monopolized by OpenAI, “it may also deter developers and other key talent from joining X, who may prefer to work at well-funded companies,” X states in the suit.