Suit claims anticompetitive exclusive agreements in generative AI chatbot and smartphone markets.
X Corp. and X.AI LLC sued Apple Inc. and OpenAI today (8/25/2025) alleging violations of federal and state antitrust laws, including Sections 1 and 2 of the Sherman Antitrust Act and the Texas Free Enterprise & Antitrust Act. Plaintiffs demand a jury trial and seek injunctive relief, damages, and other remedies to address what they describe as a coordinated effort by Apple and OpenAI to stifle competition in the generative AI chatbot and smartphone markets.
The suit was filed in federal court in Fort Worth, Texas (X Corp. and X.AI LLC v. Apple Inc. and OpenAI, No. 4:25-cv-00914-P, N.D. Texas, Fort Worth Div.).
Key Allegations
The plaintiffs, X Corp. (owner of the social media platform X, formerly Twitter) and X.AI LLC (developer of the generative AI chatbot Grok), accuse Apple and OpenAI of entering into an exclusive agreement that unlawfully restrains trade and maintains monopolies in their respective markets.
According to the complaint, Apple integrated OpenAI’s ChatGPT into its iOS operating system, making ChatGPT the sole generative AI chatbot available for native integration on iPhones. This arrangement allegedly forecloses competitors like Grok from accessing billions of user prompts generated by iPhone users, a critical resource for scaling and improving generative AI models.
The plaintiffs argue that this exclusive integration harms competition by depriving rival generative AI chatbots of scale, suppressing innovation, and reducing consumer choice.
They further maintain that Apple has manipulated its App Store rankings to favor ChatGPT while deprioritizing competing apps like Grok and X. Additionally, Apple is accused of delaying approvals for updates to Grok’s app, further hindering its ability to compete.
Causes of Action
The causes of action include:
Unlawful Agreement in Violation of Section 1 of the Sherman Act: Plaintiffs allege that Apple and OpenAI’s exclusive arrangement constitutes an illegal restraint of trade, foreclosing competition in the generative AI chatbot market and suppressing the development of super apps that could disrupt Apple’s smartphone monopoly.
Monopolization and Attempted Monopolization in Violation of Section 2 of the Sherman Act: Apple is accused of maintaining its monopoly in the U.S. smartphone market by inhibiting the development of super apps, while OpenAI is alleged to have monopolized the generative AI chatbot market by foreclosing rivals from critical resources.
Conspiracy to Monopolize: Plaintiffs claim that Apple and OpenAI conspired to leverage their respective monopolies to maintain dominance in their markets, harming competition and innovation.
Unfair Competition: The complaint asserts that the defendants’ conduct violates the policy and spirit of antitrust laws, interfering with the plaintiffs’ ability to scale their businesses.
Violations of the Texas Free Enterprise & Antitrust Act: Plaintiffs allege that the defendants’ conduct constitutes monopolization, attempted monopolization, and conspiracy to monopolize under Texas law.
Musk’s Discontent
Elon Musk, a co-founder of OpenAI, has become one of its most vocal critics. After leaving the company’s board in 2018, Musk has repeatedly accused OpenAI of abandoning its nonprofit mission and aligning too closely with corporate interests, particularly Microsoft.
Musk’s legal battle with Apple didn’t begin with today’s lawsuit. Over the past year, he has repeatedly accused Apple of anticompetitive behavior, including manipulating App Store rankings to favor OpenAI’s ChatGPT over his own Grok chatbot. In 2024, Musk even threatened to ban Apple devices from his companies if ChatGPT was integrated at the OS level, calling it a security risk. These earlier disputes laid the groundwork for the current antitrust suit, which alleges a broader scheme to suppress AI competition.
Implications for Antitrust Law
This case highlights the intersection of antitrust law and emerging technologies like generative AI. The plaintiffs argue that Apple and OpenAI’s conduct not only harms competitors but also stifles innovation and consumer choice in two critical markets. The complaint underscores the importance of scale and network effects in the generative AI chatbot industry, as well as the competitive threat posed by super apps to entrenched smartphone monopolies.
Antitrust attorneys and companies are monitoring this case for its potential impact on antitrust enforcement and the regulation of exclusive agreements in technology markets.
