Musk-Altman battle escalates as Tesla CEO drags Apple into the spat

CNBC

3 days ago

There's a new company at the center of the intensifying battle between Elon Musk and Sam Altman: Apple.
Musk and Altman, who helped start OpenAI a decade ago with a group of other co-founders, had a public falling out that led to a legal fight last year, with Musk accusing Altman of breach of contract for abandoning the artificial intelligence company's founding mission.
The back-and-forth war of words and lawsuits took another dramatic turn on Monday, when Musk threatened Apple with "immediate" legal action over alleged antitrust violations. Musk's complaint, which he voiced on his social media site X, is that Apple favors OpenAI's ChatGPT over X's Grok chatbot in the App Store.
"Apple is behaving in a manner that makes it impossible for any AI company besides OpenAI to reach #1 in the App Store, which is an unequivocal antitrust violation," Musk wrote, without citing evidence. "xAI will take immediate legal action."
Apple partnered with OpenAI in mid-2024 to integrate ChatGPT into its iPhone, iPad, Mac laptop and desktop products. Readers added context to Musk's post, pointing out that China's DeepSeek reached the top spot in the App Store in January of this year, and that Perplexity was No. 1 in India in July.
Altman quickly responded to Musk's accusations.
"This is a remarkable claim given what I have heard alleged that Elon does to manipulate X to benefit himself and his own companies and harm his competitors and people he doesn't like," Altman wrote in a post on X Monday night.
Altman referenced a 2023 report from tech news site Platformer that described how Musk, after acquiring Twitter (now X), made sweeping platform changes and "created a special system for showing you all his tweets first."
Altman said that if Musk ended up filing a suit, he hoped it would lead to "counter-discovery on this," adding that he and many others "would love to know what's been happening."
The feud continued into the morning hours on Tuesday.
"You got 3M views on your bulls--- post, you liar, far more than I've received on many of mine, despite me having 50 times your follower count!" Musk wrote.
Musk's X account indicates he has 224 million followers, but the company has never disclosed how many could be bots. Altman's account on X lists 3.9 million followers.
Altman clapped back, asking if Musk would "sign an affidavit that you have never directed changes to the X algorithm in a way that has hurt your competitors" or helped his own companies, and said he would offer a personal apology in return.
Neither Musk nor his attorneys responded to requests for comment. OpenAI referred CNBC to Altman's posts and the company's past statements. Apple declined to comment.
Musk stepped down from the OpenAI board in 2018, after hiring another founding member of the startup, Andrej Karpathy, to run the Autopilot team at Tesla. Around the time he left OpenAI, Musk said he saw AI as "potentially more dangerous than nukes."
As part of his lawsuit against OpenAI, Musk asked a federal court to stop the AI startup from converting into a fully for-profit business. Musk argued that OpenAI ditched its original mission as a nonprofit to develop AI "for the benefit of humanity broadly." A federal judge in California denied Musk's effort to halt the transformation.
OpenAI has emerged as a massive commercial enterprise since the public launch of ChatGPT in late 2022, and is now in talks with investors about a stock sale that would value the company at roughly $500 billion, CNBC confirmed last week.
Musk formed xAI in March 2023, announcing its debut four months later. Since then, he has raised billions of dollars for the company, merged it with X and called for Tesla, his only publicly traded business, to invest billions more into the AI company.
In February, a Musk-led group of investors offered to buy control of OpenAI for $97.4 billion. Altman responded on X, saying, "no thank you but we will buy twitter for $9.74 billion if you want."
In dragging Apple into the dispute, Musk has focused on the App Store, where ChatGPT is currently the top-ranked free app while Grok is fifth. Musk took issue with ChatGPT being listed as one of the store's "Must-Have Apps," a list that does not include Grok.
"Why do you refuse to put either X or Grok in your 'Must Have' section when X is the #1 news app in the world and Grok is #5 among all apps? Are you playing politics?" Musk wrote in a post.
Grok releases have been riddled with safety issues and concerns surrounding manipulation of the technology. In May, the chatbot promoted false claims about alleged "white genocide" in South Africa, leading Musk to write that the automatic responses were the result of an "unauthorized modification." In July, Grok responses across X included praise for Adolf Hitler.
Musk's threats to Apple come as the iPhone maker faces pressure from regulators and competitors over App Store policies. A panel of judges in June denied Apple's emergency application to halt changes to its App Store that resulted from the company's legal battle with Epic Games. In 2021, a judge ruled that Apple could no longer prohibit developers from directing users away from the company's in-app purchasing, which brings with it up to 30% of gross sales.