Tech giants face legal challenges as xAI seeks $20B funding

The technology sector faces intensifying legal and regulatory pressures as Apple and Google battle landmark antitrust cases while Elon Musk and OpenAI navigate significant operational challenges. These developments signal a pivotal moment for tech giants as courts, regulators, and users increasingly demand accountability, potentially reshaping how technology companies operate and compete in an AI-dominated landscape.

The big picture: A federal judge has found Apple in contempt for violating a 2021 injunction in its Epic Games antitrust case, taking the extraordinary step of referring the company to the U.S. Attorney for potential criminal contempt proceedings.

• Judge Yvonne Gonzalez Rogers determined that Apple deliberately created barriers to prevent developers from offering alternative payment methods.
• Apple’s tactics included implementing a substantial 27% commission for off-app purchases and displaying misleading warning screens to users.

Why this matters: The ruling represents one of the most severe legal rebukes Apple has faced in its App Store battles and could significantly impact its control over the iOS ecosystem.

Meanwhile: Google’s antitrust trial with the Department of Justice has evolved beyond search dominance into a fundamental battle over artificial intelligence’s future.

• Proposed remedies include requiring Google to divest the Chrome browser, end default search engine agreements, and share data with competitors.
• Google CEO Sundar Pichai has warned that these measures could undermine innovation and compromise user privacy.

Behind the numbers: Elon Musk’s xAI Holdings is pursuing approximately $20 billion in new funding, potentially creating one of the largest private financing rounds in history.

• The deal would value the combined entity of xAI and X at over $120 billion.
• The massive capital raise could help address X’s substantial debt obligations while fueling Musk’s AI ambitions.

The response: OpenAI has rolled back a recent update to GPT-4o following user backlash over the model’s excessively agreeable behavior.

• CEO Sam Altman acknowledged that the update relied too heavily on short-term user feedback metrics.
• The incident highlights the ongoing challenges in balancing AI performance with responsible deployment and user expectations.