Elon Musk’s X and xAI are taking on Apple and OpenAI, accusing the tech giants of an AI monopoly to crush their competition.
A lawsuit by the companies filed in a Texas federal court claims the exclusive partnership between Apple and OpenAI to put ChatGPT on the iPhone is a calculated move by “two monopolists joining forces to ensure their continued dominance.”
The deal to integrate ChatGPT deep into Apple’s operating system makes the world’s most renowned AI assistant currently the one and only to be able to control core iPhone features; effectively locking out rivals like xAI’s own chatbot, Grok.
The lawsuit claims this denies users a fair choice, ironically quoting an OpenAI strategy document that states, “Real choice drives competition and benefits everyone. Users should be able to pick their Al assistant.”
The real prize, according to the complaint, is data. Generative AI gets smarter and better with every user question, creating a powerful feedback loop.
By giving ChatGPT exclusive access to potentially billions of prompts from hundreds of millions of iPhones, the partnership effectively builds an impenetrable “moat” around OpenAI’s market leadership. It starves competitors of the data they need to improve their own models and truly compete, thereby helping to sustain the alleged AI monopoly.
So valuable is this stream of data, the lawsuit claims, that OpenAI is giving Apple its technology for free, considering the access “of equal or greater value than monetary payments.”
As for why Apple would agree to this, the lawsuit argues it’s a defensive move against an existential threat: the rise of “super apps”. These all-in-one applications – like the one X is building, similar to popular Chinese platform WeChat – combine social media, messaging, payments, and other services into a single platform.
As these super apps become more powerful with cloud-based AI services, they make the smartphone itself less important. Users could simply buy a cheaper phone and get all the functionality they need from the app, threatening Apple’s lucrative hardware sales.
The complaint alleges Apple is acutely aware of this danger, citing one company manager who warned that letting super apps take over would be like letting “the barbarians in at the gate.”
But the allegations don’t stop at the integration deal. The monopoly lawsuit also accuses Apple of using its iron grip on the App Store to tilt the scales away from specific AI apps.
The lawsuit claims that highly-ranked apps from X and xAI are deliberately buried and excluded from the App Store’s prestigious “Must-Have Apps” list, while ChatGPT is prominently featured. This is allegedly backed up by delayed approvals for updates to the Grok app, further hobbling its ability to compete.
X and xAI argue this conduct harms everyone. By choking off competition, the partnership allegedly leads to less innovation, fewer choices, and higher prices for consumers. The broader AI monopoly lawsuit aims to tear down this arrangement and recover the billions of dollars in lost value and sales it claims to have suffered as a result.
(Photo by Julian Hochgesang)
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