OpenAI is asking a Texas federal judge to dismiss an antitrust lawsuit brought by Elon Musk's AI startup xAI. OpenAI argues that disclosures made by xAI's parent company, SpaceX, contradict xAI's claims that Apple's partnership with OpenAI excluded rivals. The lawsuit, filed last year by Musk's companies against Apple and OpenAI, alleges that Apple violated antitrust law by exclusively integrating ChatGPT into Apple Intelligence features on its devices. Both Apple and OpenAI have denied wrongdoing, with Apple previously stating its integration deal was not exclusive. xAI settled with Apple last week, though the terms remain undisclosed.
OpenAI's recent court filing contends that deposition testimony and other evidence reveal Apple's ChatGPT tools "dramatically underperformed" in trials. This underperformance led Apple to seek integrations with other large language models. OpenAI further claims that its deal with Apple was never exclusive, and that Apple was actively exploring partnerships with competitors, including Google and Meta, even after striking a deal with OpenAI. These revelations, according to OpenAI, invalidate xAI's core argument that the Apple-OpenAI partnership created an anti-competitive environment. The case is currently scheduled for trial in January.
Separately, OpenAI is projected to burn through a substantial amount of cash. A company presentation cited by the Financial Times and Bloomberg indicates that OpenAI expects its negative free cash flow to reach $278 billion between 2026 and the end of 2030. This figure was reportedly part of a private presentation in July related to a computing deal. Other reports suggest OpenAI spent close to $5 billion on inference alone in the first half of 2025, with a cash burn of $2.5 billion against $4.3 billion in revenue during the same period. Over the last seven quarters, OpenAI is estimated to have spent over $12.4 billion at Azure on inference compute, while its implied revenue for that period was a minimum of $6.8 billion, highlighting a significant gap between running costs and revenues.
OpenAI's public stance on the lawsuit, including publishing evidence mid-case, is seen as an attempt to sway public opinion rather than a direct legal tactic. This move comes amidst broader competitive pressures, as OpenAI has been making strategic moves into Apple's core device market. This includes the acquisition of Jony Ive’s design studio io for $6.5 billion and the hiring of over 400 former Apple staff, aiming to build its own devices and challenge Apple's app ecosystem and hardware dominance. While Apple maintains strong financials with a 48% gross margin and $137 billion in trailing free cash flow, OpenAI's device roadmap, including a rumored palm-sized, screenless AI companion, remains unproven. The lawsuit highlights a long-term structural risk for Apple's dominance if screenless AI assistants replace smartphones.
