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Apple and OpenAI are both facing a lawsuit from Elon Musk’s xAI, which alleges that the two companies are working together to create an AI monopoly and stifle competition.
The lawsuit suggests that OpenAI’s industry dominance and its integration into Apple is creating a monopoly and could breach anti-trust laws.
“Apple and OpenAI have locked up markets to maintain their monopolies and prevent innovators like X and xAI from competing,” the lawsuit reads.
The lawsuit points out that Apple has demonstrated “the risks that can befall a company that fails to innovate in AI”, adding that the technology could destroy the company’s smartphone market dominance of 65 per cent.
“In a desperate bid to protect its smartphone monopoly, Apple has joined forces with the company that most benefits from inhibiting competition and innovation in AI: OpenAI, a monopolist in the market for generative AI chatbots,” the lawsuit continues.
The lawsuit then directs its swings at OpenAI, pointing out its major market dominance and the way in which it is stunting the growth of other AI companies like xAI.
“Today, OpenAI controls at least 80 percent of the market. Because of OpenAI’s monopoly, other generative AI chatbots have struggled to gain share,: the lawsuit reads.
“xAI’s Grok has yet to gain more than a few percent of the market despite accolades about its superior features.”
xAI is concerned that the partnership between the dominant AI company and the dominant smartphone firm will create a dramatic technological monopoly and stifle growth dramatically across both industries, and prevent other AI developers from innovating and growing.
As these generative AI chatbots are developed on a feedback loop from prompts, the exclusivity of OpenAI and ChatGPT on iPhones isolates a massive percentage of the population, 1.46 billion of 4.88 billion smartphone users in 2024, ensuring that their prompts and AI conversations only further OpenAI products.
“This makes it hard for competitors of ChatGPT’s generative AI chatbot and super apps powered by generative AI chatbots to scale and innovate,” the lawsuit added.
xAI also points out the irony of OpenAI’s Apple exclusivity, calling the AI giant hypocritical after saying that competition is important for innovation.
“Real choice drives competition and benefits everyone. Users should be able to pick their AI assistant,” OpenAI allegedly stated in their strategy document.
OpenAI denied the allegations made in the lawsuit, saying that it was part of the wider harassment campaign Musk has engaged in against OpenAI for the last few years.
This latest filing is consistent with Mr Musk’s ongoing pattern of harassment,” an OpenAI spokesperson said, as seen by The Guardian.
Musk, who was a co-founder of OpenAI along with current CEO Sam Altman, left the company in 2018 after he proposed taking over the company. He has since attempted to purchase OpenAI and launched a number of lawsuits against the company.
Both Altman and OpenAI have rejected Musk and xAI’s claims.
“We’re sad that it’s come to this with someone whom we’ve deeply admired – someone who inspired us to aim higher, then told us we would fail, started a competitor, and then sued us when we started making meaningful progress towards OpenAI’s mission without him,” said OpenAI in a statement last year regarding a former lawsuit.
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