In a Monday escalation of a long-running dispute, Elon Musk’s company sued Apple and OpenAI for their deal to integrate ChatGPT into iPhone features, alleging the two firms are conspiring to cement monopolies in the rapidly growing AI chatbot market.

The lawsuit follows weeks of complaints from Musk about Apple’s placement of ChatGPT in the App Store and its preferential treatment for OpenAI. Musk’s complaint on Monday goes further than his App Store concerns, however, and alleges that Apple and OpenAI have entered into an exclusivity arrangement that will result in OpenAI controlling chatbot access to iPhone functions and users.

The suit, filed on behalf of Musk’s X and xAI companies, argues the two firms’ arrangement violates U.S. antitrust and unfair competition laws, and if left unchecked, will undermine his plans to build an “everything app” atop the foundation of his newly acquired Twitter.

In the suit filed Monday in the Northern District of California, X contends Apple’s deep integration of ChatGPT into iOS as the default chatbot used by Siri, Apple’s Writing Tools, and other functions gives OpenAI exclusive access to billions of users’ prompts, data, which is critical for training and improving chatbot models. Rivals like Grok, Musk argues, have little to no access to that data, and without it, cannot scale to meet the needs of Apple’s hundreds of millions of users.

The filing estimates OpenAI currently commands at least 80 percent of the chatbot market, but with Apple’s help, its share “will be cemented forever.”

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

Apple, Musk argues, is seeking to eliminate a competitor it fears could one day supplant the iPhone as the platform of choice, much like WeChat in China has become a super app that fulfills all functions previously performed by smartphones. The lawsuit cites Apple executive Eddy Cue as even having told Musk he worried advances in AI might “destroy Apple’s smartphone business.”

The comparison to Apple’s long-standing, and according to U.S. regulators, monopoly-enforcing deal with Google for default search engine integration is a central tenet of Musk’s case. The new filing from X and xAI, the companies Musk chairs and runs, respectively, also contends Apple rebuffed repeated integration and data-sharing requests from xAI for Grok and that Apple had not only demoted Grok on the App Store but also refused to feature Grok when it first announced a new “Imagine” feature.

In addition to that, the filing says Apple manipulated App Store rankings for the Grok app and delayed Grok updates as part of a broader effort to stifle competition. Beyond those specific examples, X more broadly argues that it fears that once “Apple and OpenAI have shut out the competition for iOS users, they will expand their anticompetitive behavior to other platforms.”

But for Musk and X, it’s not just about Grok’s market share. The lawsuit also emphasizes that the future of AI-driven apps and platforms is at stake, with the filing pointing to Siri having already handled 1.5 billion user requests across the globe every day in 2024. That total far outstrips the total number of prompts received by all generative AI chatbots combined that year, X claims. If OpenAI alone receives those prompts, that amounts to as much as 55 percent of all potential chatbot data and prompts effectively captured by the company, according to X.

The filing also warns of consumer impact if Apple and OpenAI maintain their status quo, predicting customers will have fewer options and less capable chatbots, while paying monopoly prices for devices and software. The lawsuit also alleges OpenAI is already in a position to increase prices on its own subscriptions, with a stated plan to double its “plus” subscription over the next four years. “That plan would be unfeasible unless OpenAI has power over marketwide prices,” the filing says.

Finally, Musk’s lawsuit details the chilling effect on investment in the AI chatbot market. If Apple is to “continue to press its thumb firmly on the scale in ChatGPT’s favor,” Musk argues, investors will see little value in building rivals, denying them the funding necessary to grow and compete. If Big Tech firms instead start scooping up developers and projects from underfunded startups, that talent could be “irretrievably lost” to the market as a whole.

The filing also questions the financial logic of the Apple-OpenAI deal for both firms if purely cash flow were the motive. X claims OpenAI provided ChatGPT to Apple for free, and OpenAI paid for the partnership itself, while Apple expects to make little to no money from the deal in the near term. Instead, X suggests both Apple and OpenAI view the exclusivity as more important than direct revenue, as it not only enforces their market position but blocks the near-term prospects for rivals.

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

Musk, who has led the newly-public X and xAI since acquiring Twitter for $44 billion last year, says the stakes are existential for his vision of an “everything app” incorporating features like payments, messaging, news, commerce, social, search, and now AI-generated content creation. Musk and X, he argues, “face the real risk that Grok will never be able to compete in the market on anything resembling fair terms” and that with fewer users and services, X will be less valuable.