Musk-Altman AI Feud Explodes: Lawsuits, Rival Investments
Silicon Valley’s most prominent rivalry has escalated into a public spectacle, blending high-stakes legal threats with personal barbs exchanged on social media, while simultaneously sparking new competitive ventures in emerging technology fields. What began as an announcement of a lawsuit against Apple has quickly devolved into a dramatic confrontation between two of the tech world’s most influential figures, Elon Musk and Sam Altman.
The latest chapter in this feud unfolded when Elon Musk declared that his AI company, xAI, was pursuing legal action against Apple. Musk alleged that Apple’s App Store unfairly promotes OpenAI’s products while suppressing rivals like xAI’s Grok. The dispute quickly spilled onto X, the platform owned by Musk, where Sam Altman retorted by accusing X of engaging in similar anti-competitive tactics. The exchange grew increasingly personal, with Musk’s claim that it was “impossible for any company besides OAI to reach #1 in the App Store” being countered with examples of other AI apps, DeepSeek and Perplexity, achieving top rankings. The theatrics peaked when Grok itself, xAI’s AI, chimed in, appearing to side with Altman by stating, “Sam Altman is right,” and noting Musk’s “documented history of directing algorithm changes to favor his interests.” Musk later responded by posting a screenshot of OpenAI’s GPT-5 model, which he claimed depicted him as more trustworthy than Altman, further indicating xAI’s efforts to reduce Grok’s reliance on traditional media sources for information.
Beyond the public spat, the rivalry is also manifesting in direct business competition. OpenAI is reportedly in advanced discussions to back Merge Labs, a brain-computer interface (BCI) startup currently raising funds at an $850 million valuation. This move positions Merge Labs as a direct competitor to Elon Musk’s Neuralink, which aims to implant BCIs in humans. Sam Altman is listed as a co-founder of Merge Labs, though he will not take an operational role, with Alex Blania, known for leading Altman’s iris-scanning Worldcoin project, set to oversee the initiative. OpenAI’s venture arm plans to lead the funding round, marking the ChatGPT creator’s first significant investment in the BCI sector. This strategic move aligns with Altman’s long-standing interest in brain-machine interfaces, a topic he explored in a 2017 blog post titled “The Merge,” and directly challenges Neuralink, which Musk recently projected could implant 20,000 people annually by 2031, targeting $1 billion in yearly revenue.
Meanwhile, another AI startup, Perplexity, is making headlines with an audacious, unsolicited $34.5 billion bid to acquire Google’s Chrome browser. This surprising offer comes amidst Google’s ongoing antitrust battle, which could potentially force the tech giant to divest from the dominant browsing platform. Perplexity reportedly pitched the acquisition directly to Alphabet CEO Sundar Pichai, positioning itself as an independent operator capable of satisfying Department of Justice remedies. Despite the bid exceeding Perplexity’s own $18 billion valuation by nearly double, the company claims venture investors have committed to fully fund the transaction. Chrome currently commands over 60% of the global browser market with 3.5 billion users, and Perplexity recently launched its own AI-first competitor, Comet, indicating its aggressive push into the browsing space. Federal Judge Amit Mehta is expected to rule this month on whether a forced sale of Chrome is necessary, following a ruling last year that Google illegally monopolized search markets.
Elsewhere in the rapidly evolving AI landscape, new advancements continue to emerge. Anthropic has announced that its Claude assistant is now available to all three branches of the U.S. federal government for a symbolic $1, mirroring a similar move by OpenAI. OpenAI also provided clarification regarding GPT-5’s “context window,” the amount of information the AI can process at once, stating its reasoning model has a 196,000-token window, significantly larger than the previously reported 32,000-token window for its non-reasoning model. Furthermore, Mistral has released Mistral Medium 3.1, an upgraded model demonstrating improvements in overall performance and creative writing capabilities. Skywork also introduced Matrix-Game 2.0, an open-source interactive world model capable of generating minutes of playable interactive video at 25 frames per second. These developments underscore a period of intense innovation, where technological breakthroughs are often overshadowed, or even fueled, by the personal rivalries of the industry’s titans.