In a new escalation of his feud with Apple and OpenAI, Elon Musk on Monday filed a lawsuit accusing the two companies of conspiring to use their dominant positions in the technology sector to entrench monopolies in a fast-growing sector, the market for AI chatbots. Musk’s companies X and xAI filed the suit, which marks a major escalation of a dispute that has simmered for months. Just weeks prior, Musk took to Twitter to complain that Apple has been “constantly promoting” OpenAI’s ChatGPT app, while ignoring his own rival chatbot Grok.

The filing goes well beyond gripes over App Store search rankings, however. Musk’s companies claim Apple and OpenAI have entered into an exclusive arrangement that gives ChatGPT access to unprecedented features on the iPhone, and makes it harder for Grok and other chatbots to scale and reach Apple’s massive customer base. The lawsuit says the arrangement violates antitrust and unfair competition laws and threatens Musk’s long-promised vision of building an “everything app” on top of Twitter, which he bought in 2022.

Apple, for its part, integrated ChatGPT into iOS as the default chatbot for Siri and Apple’s own Writing Tools. OpenAI has gotten access to billions of resulting user prompts as part of the deal. The plaintiff companies argue that access to user prompts is necessary for training and improving these models, and that Apple’s arrangement with OpenAI is locking out competitors from its user base and will cement OpenAI’s dominance of the market. X’s filing estimates OpenAI already has at least an 80 percent share of the chatbot market, and Apple’s efforts could make it permanent.

“Generative AI chatbots would vigorously compete with one another in a fair market,” the lawsuit states. “Instead, defendants’ anticompetitive conduct has handed a substantial portion of the market to ChatGPT.”

X also accuses Apple of being motivated by a fear that a successful rival super app could one day make iPhones less essential, the way WeChat in China has become an all-in-one replacement for many standalone smartphone apps. The suit cites Apple executive Eddy Cue as allegedly expressing concerns in an internal chat that AI advances could “destroy Apple’s smartphone business.” Musk’s filing frames the deal as part of an effort by Apple to keep its smartphone monopoly alive, and by OpenAI to build an insurmountable lead in the burgeoning generative AI sector.

Apple and OpenAI have forged a deal Musk compares to Apple’s longstanding exclusive arrangement with Google for search. The relationship was the subject of an antitrust lawsuit by the U.S. Justice Department, which regulators have argued entrenched Google’s search engine monopoly. Musk claims that Apple rebuffed repeated attempts by xAI to integrate Grok with iOS, and refused to even feature Grok on the App Store, including during the launch of a new “Imagine” tool that Grok was designed to support. The filing further claims Apple has manipulated App Store rankings and delayed Grok updates to keep it from competing.

Musk argues that much is at stake beyond Grok’s ability to compete, however. He also suggests the lawsuit may be about the very future of new AI-powered platforms. The filing notes that Siri handled 1.5 billion user requests per day on average across the globe in 2024, a figure higher than the total number of prompts for all other generative AI chatbots combined in the same period. OpenAI is the only chatbot with access to those prompts, giving it total control of up to 55 percent of all chatbot interactions, X alleges.

The plaintiff companies warn that the consequences for consumers could be significant. Apple customers may end up with fewer choices and less capable chatbots, Musk’s lawsuit claims, while paying monopoly prices for iPhones. At the same time, OpenAI could use its leading position in the market to raise prices on subscriptions. The lawsuit notes that OpenAI plans to double its “plus” subscription cost over the next four years. “That plan would be unfeasible unless OpenAI has power over marketwide prices,” the suit alleges.

The filing also sounds the alarm over a chilling effect on investment, suggesting that Apple’s deal with OpenAI and its ongoing efforts to “press its thumb firmly on the scale for ChatGPT” will make it a nonstarter for investors, depriving other potential companies of the capital they need to grow. Worse, X’s suit suggests that Big Tech firms like Apple, Meta, Microsoft, and Google could end up vacuuming up developers and other talent from underfunded startups.

The lawsuit’s filing further raises questions over the financial logic of the Apple-OpenAI deal. Under the terms, OpenAI provided Apple with ChatGPT free of charge, effectively paying for its own part of the deal. Apple, for its part, does not anticipate near-term profits. Musk’s companies suggest that both companies have deemed the exclusivity to be far more valuable than immediate revenue, as it broadly blocks the path for rivals.

“By making the deal exclusive, Apple sacrificed the profits it would have earned by integrating multiple chatbots,” the complaint argues. “The true motive was Apple and OpenAI’s shared goal of blocking competition.”

Musk has a lot riding on the lawsuit. He warns that unless Apple and OpenAI are required to change course, Grok and, by extension, X may be unable to ever fairly compete. He further says that could make X less attractive to both users and investors. “Because Grok’s functionality is a key feature of the X app, the X app is more attractive the better Grok performs,” the filing says. “Defendants’ conduct makes Grok less able to compete with ChatGPT, leading to fewer customers, less revenue, and ultimately a depressed enterprise value for X.”

The lawsuit is seeking billions of dollars in damages, as well as a permanent injunction to prevent Apple’s exclusive integration of ChatGPT on iOS. OpenAI dismissed the filing in a statement to Ars Technica as part of Musk’s “ongoing pattern of harassment.” Apple did not respond to a request for comment.

A court’s decision on whether Musk’s companies can make the case that Apple and OpenAI have illegally entrench their monopolies could determine not only the future of Grok but also how competitive the coming era of AI technology innovation will be.