Tesla CEO Elon Musk’s threatened legal action against Apple over its App Store rankings could hurt the larger company, according to prominent tech analyst Dan Ives. Elon Musk, who’s also the CEO of xAI, the startup behind AI chatbot Grok, on Monday threatened to sue Apple over alleged antitrust violations tied to rankings of Grok’s app. Musk accused the iPhone maker of favoring other AI competitors in its App Store. “It’s a massive headache and headwind for Apple,” Ives, global head of tech research at Wedbush Securities, said on CNBC’s “Worldwide Exchange” early Tuesday. “The last thing you want right now is Musk putting his force behind this legally, especially given all the regulatory scrutiny that Apple is seeing right now. Look, this is something that can really sort of spiral and take on a life of its own.” Musk’s prominence may be damaging sentiment toward Apple, Ives said. “The issue here is with Musk going full force after Apple, this could really change the dynamic, not just between Musk and Apple, but if others get involved,” Ives said. “I think that’s the nervousness … that’s why you can see Apple pull back because of Musk, and obviously the power he brings.” Apple shares are down more than 9% year to date while the S & P 500 has risen about 9%. Tesla is lower by about 17% in 2025, hurt by rising competition and slack demand. AAPL 1Y mountain Apple stock performance over the past year. Musk threatened legal action against Apple in separate posts Monday on his social media platform X. “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. xAI will take immediate legal action,” Musk wrote in one post. Another post added, “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?” ChatGPT is ranked No. 1 in the top free apps section of the American iOS store. Apple in June 2024 partnered with OpenAI to integrate ChatGPT into its iOS, iPadOS, and macOS system functions. App Store placement is the “lifeline” of AI chatbots such as ChatGPT and Grok, Ives said. “Musk is a wartime CEO focused all on xAI, focused on Grok, focused on where the ecosystem is going,” the analyst continued. “Being placed on the App Store is extremely important. Again, it’s something where if it’s just me or someone else, it means nothing. The fact it’s Musk with the ecosystem, that’s where this is a huge shot across the bow toward Apple.”
