A federal judge, U.S. Magistrate Judge Hal R. Ray Jr, has blocked a key move by Elon Musk’s X and xAI in their lawsuit against Apple and OpenAI over AI features on the iPhone, reports The MacObserver.
In August 2025 Musk filed a lawsuit in a Texas court against Apple and OpenAI, accusing the companies of colluding to prevent competition in the artificial intelligence industry.
From the lawsuit: Apple and OpenAI’s exclusive arrangement has made ChatGPT the only generative AI chatbot integrated into the iPhone. This means that if iPhone users want to use a generative AI chatbot for key tasks on their devices, they have no choice but to use ChatGPT, even if they would prefer to use more innovative and imaginative products like xAI’s Grok.
As a result of Apple and OpenAI’s exclusive arrangement, ChatGPT is the only generative AI chatbot that benefits from billions of user prompts originating from hundreds of millions of iPhones. This makes it hard for competitors of ChatGPT’s generative AI chatbot and super apps powered by generative AI chatbots to scale and innovate.
Worse still, Apple has taken further steps to protect its monopoly in smartphones and to preference OpenAI by deprioritizing the apps of competing generative AI chatbots and super apps in its App Store rankings, and it has dragged out its App Store app review processes for those competitors.
On October 1, 2025, Apple filed a court motion to dismiss Elon Musk’s ridiculous lawsuit claiming the tech giant prevents competition in the AI field.
“The App Store is designed to be fair and free of bias. We feature thousands of apps through charts, algorithmic recommendations, and curated lists selected by experts using objective criteria,” Apple says. “Our goal is to offer safe discovery for users and valuable opportunities for developers, collaborating with many to increase app visibility in rapidly evolving categories.”
From the judge’s decision: The Court concludes that OpenAI’s source code is not relevant to Plaintiffs’ claims and is not within the scope of discovery under Rule 26. […] Although OpenAI’s source code certainly would be of great interest to Plaintiffs, Rule 26 does not require its disclosure. Before the Court would order production of any party’s sensitive, confidential information such as the source code at issue here, the requesting party would have to show that it had attempted to gather the necessary information for developing the claim or defense underlying its request without reference to that highly sensitive information. Plaintiffs have not done so here, though they still have ample opportunities to develop evidence in discovery regarding the feasibility of integrating Grok into Apple iPhones and other products without having unfettered access to OpenAI’s source code.
“[…] Plaintiffs present their competitor OpenAI with a choice: hand over its most sensitive proprietary information or admit that Grok could have been integrated into the iPhone operating system. The Court does not order OpenAI to produce its source code. […] And even if the source code requested were potentially relevant, which the Court does not find, its production is not proportional to the needs of the case.”
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Article provided with permission from AppleWorld.Today
