Apple lawsuit accuses OpenAI of stealing trade secrets, threatening its AI hardware ambitions

Can an Apple lawsuit derail OpenAI's hardware plans?

Apple recently filed a trade secrets lawsuit against OpenAI, accusing the AI company of a pattern of misconduct aimed at getting current and former Apple employees to share confidential information. (In response, OpenAI said it is "not aware of any evidence that this complaint has merit.") On the latest episode of TechCrunch's Equity podcast, Kirsten Korosec, Sean O'Kane, and I debated whether this lawsuit will cast a shadow over OpenAI's much-discussed plans to get into the hardware business (starting with a mobile smart speaker) and go public. "Even setting aside whether or not the court grants any kind of injunctive relief or any kind of restraining order over what OpenAI is doing, it just naturally can lead to that sort of situation where it's going to cause some delays in what OpenAI is working on," Sean suggested. "Which I'm sure was probably part of the reasoning behind Apple doing this. They don't do this stuff willy nilly." With all those plans on the line, will OpenAI try to settle this as quickly as possible, or did it learn from its recent courtroom victory against Elon Musk that it can endure the cost and embarrassment of a trial? Kirsten, at least, predicts the latter. Keep reading for a preview of our conversation, edited for length and clarity. Kirsten Korosec: Sean, how do you feel about Sam Altman listening to you with a little device maybe in your pocket? Sean O'Kane: I'm good. Maybe that's predictable, but I'm good. No thanks. We'll get into it, I'm sure, but this is allegedly the first product that OpenAI has been working on in its hardware division with Jony Ive and company. They've been really coy ever since that weird video they put out last year of them sitting at that coffee shop or bar in San Francisco and sort of talking very vaguely about hardware and legacy devices, meaning laptops and phones. And so if this is the direction they're headed in, all power to people who want to have somebody like that always listening to them. This is not going to be for me. Anthony Ha: Part of what we have to remember about those kinds of devices is also that, depending on how mobile it is, it's not just listening to you, it's listening to the people around you. I might be fine with it -- I'm not fine with it, but let's say I was -- but then if we met up in-person at Disrupt, then suddenly it might be listening to all of us. There's all kinds of social norms that are going to have to be renegotiated if these things become widespread. I think we should make fun of and criticize people who record other people without consent. Kirsten: Well, I bring up the device that has been speculated about for a really long time, and we'll see what it really ends up being once it's officially introduced, but it's important in the context of this lawsuit that Apple filed last Friday. It was the biggest news of the week, certainly, and this is a trade secret lawsuit. It has some pretty wild allegations and we should very much emphasize these are allegations that have been filed in a complaint by Apple. But what it is accusing OpenAI of is a pattern of misconduct at the highest levels, specifically directed towards OpenAI employees who used to work at Apple. And in fact they've named the chief hardware officer Tang Tan in this lawsuit. This is all important because Apple is accusing OpenAI of essentially stealing their trade secrets, but in the context of that, this could be then used for a competing hardware product. I'm wondering if maybe we don't get into whether this lawsuit has merits, because we haven't gone through full discovery, but what are your initial impressions of the lawsuit aside from the fact that wow, this is going to be entertaining? Sean: Two things. One, this is a pretty big risk potentially to whatever it is OpenAI is working on. Even setting aside whether or not the court grants any kind of injunctive relief or any kind of restraining order over what OpenAI is doing, it just naturally can lead to that sort of situation where it's going to cause some delays in what OpenAI is working on, which I'm sure was probably part of the reasoning behind Apple doing this. They don't do this stuff willy nilly. The other is that we think that OpenAI is -- we know that they've filed confidentially for an IPO. We think it might happen as early as the end of this year, or early next year, if you believe Sam Altman's cautious language around the IPO. And this just raises a whole bunch of questions around that because, on the one hand, we think their business right now is probably overwhelmingly the software; they're not really factoring in any hardware business into that picture at the moment. They're about to go to the markets and they're going to be pitching bankers and investors on where they think their addressable market should be, and if they have a big amount of that pegged to a potential hardware division and hardware products, this could be a huge risk to that and changes a lot of the calculus of sort of how the IPO gets priced. So that's where my head's at. Anthony: One [allegation] that I assume that Apple must have pretty solid like numbers on is, they said more than 400 Apple employees now work at OpenAI. Granted, both of them are very large companies with many thousands or tens of thousands of employees. So as a percentage, it's not necessarily huge. But that seems like a lot of people and a pretty serious talent drain. And the other thing I'm wondering is related to Sean's point. With the context of the potential IPO, how much damage did OpenAI ultimately take from a marketing and brand perspective from the trial it already went through? That it seemed to basically win, but there was a lot of not-terrible-but-kind-of-embarrassing dirty laundry that came out in the testimony. To what extent are they just like, "We do not want to go through that again"? Or did they take the lesson of, "Hey, we went through it and we survived and we'll be okay if we have to do another trial with Apple"? Kirsten: I fully predict the latter, by the way.

What Apple's OpenAI lawsuit is really about

Today on Decoder, I'm talking with Hayden Field, The Verge's senior AI reporter, about the major trade secrets lawsuit between Apple and OpenAI and what this tells us about OpenAI's future. By now I'm sure most Decoder listeners are familiar with Apple's allegations in this case. The company says a number of ex-Apple employees at OpenAI targeted Apple's trade secrets in job interviews and even downloaded files from Apple's servers related to hardware manufacturing. The claims are shocking, although OpenAI denies them, and we have yet to see the company's legal response. Hayden has been covering OpenAI for years now, and she also just talked to a bunch of lawyers who specialize in intellectual property and trade secret law to get a sense of how serious this case is. The answer is not entirely positive for OpenAI, which spent $6.5 billion to acquire legendary Apple designer Jony Ive's AI hardware startup, io Products, back in 2025. As you'll hear Hayden explain, Apple is a notoriously tenacious litigant, and we have lots of tech industry history to back up that reputation. But those cases were against companies at the scale of Microsoft and Samsung, giant corporations that could afford the cost and distraction of this kind of litigation. OpenAI isn't yet that kind of company. It's still burning cash and a little strategically adrift as it tries to compete in both enterprise and consumer markets, and it's turning over executives on a regular basis. So Hayden and I spent a lot of time talking about what this case might mean for a company that defined the early part of the AI boom, but which lately always seems to be in a crisis of one sort or another. Okay: Verge senior AI reporter Hayden Field on the Apple-OpenAI lawsuit, and how the AI industry might change because of it. Here we go. This interview has been lightly edited for length and clarity. Hayden Field, you're the senior AI reporter for The Verge. Welcome back to Decoder. Thanks. Great to be here. Once again, we're going to talk about OpenAI, Hayden. Once again, it never stops. We're going to talk about whether OpenAI can maintain focus at a time of great distraction, which seems to be a theme with that company. Although this time, it's not their own distraction. It's a distraction from out in the world, maybe caused by some of their own behavior. Of course, we're talking about the Apple trade secret lawsuit. It feels like a big deal. Apple is accusing OpenAI of stealing all kinds of information from that company, even in job interviews -- asking people in job interviews to tell them what they know about Apple products. Tell us briefly about this lawsuit and what's going on here. Definitely. So, it is crazy. I wrote a piece last week titled "Sam Altman didn't need another lawsuit," and that's really the situation here. It seems pretty egregious from some of the claims that Apple is making. A former Apple employee was allegedly soliciting trade secrets over interviews, asking people to maybe bring pieces of hardware outside the Apple office to OpenAI to do a "show and tell" in interviews, things like that. There's a lot of allegations being made that are pretty crazy. But then when I actually interviewed a bunch of experts last week, they said they've seen all of this before, a lot. It's just they haven't seen all of it in one case with two key players. Some of this stuff is pretty egregious, if it turns out to be true. But also, to the experts in the space, they're saying, "Oh, we see this all the time with trade secrets cases. It's not crazy. What's really crazy is that it's all in one case and that it's two really large companies." It's really interesting. It's just a pattern, maybe not worth diving into at great length, but in the '90s, Apple pushed copyright law to the limit. They sued Microsoft for allegedly infringing on how the Mac looked and felt with Windows. I will point out that Windows still exists, Microsoft is fine. And then in the 2000s and early 2010s, Apple pushed patent law to the limit, suing Samsung for allegedly violating a bunch of patents with Android and Galaxy phones because Apple felt that they had protected the iPhone. Samsung eventually paid about $1 billion in damages and those cases just went around in circles forever. But I'll point out that Android still exists, Samsung is doing just fine. Apple may have redefined patent law around 3G and 4G licensing, but fundamentally, it did not actually succeed in stopping its competitors with intellectual property lawsuits. So, you go from copyright to patent and now trade secrets, which is the third big intellectual property, and Apple's doing it again with OpenAI. My big question is whether OpenAI can just pay the money the way that Microsoft and Samsung were able to just pay the money. If you look at Samsung, spending $1 billion in penalty fees to get Galaxy phones off the ground and be a major competitor in mobile is maybe the easiest and best investment that company ever made. But I don't know if OpenAI is the same company at the same moment. It certainly seems like all of the Apple employees that went over to OpenAI maybe pushed the limit too much, at least from the story that Apple's telling us right now. It's pretty crazy reading the wildest claims from the lawsuit and also the messages that were being exchanged. One of them allegedly accessed Apple confidential information on a device and then said, "LOL! So funny that I can access this." There's a lot there. I've been wondering the same thing. It really depends on Apple's willingness to be petty or be super logical here. When I interviewed a bunch of lawyers about this, they said Apple is a notoriously tenacious litigant, as we've seen in those past cases. But also, they really will take things far. They have a lot of money and they're willing to use it. It really just depends on how mad they are. I think that they would potentially settle if OpenAI paid them enough, but will OpenAI be able to do that? They're already having a really tough year. They're about to IPO, all the investors are looking at their bottom line, wondering when they're going to turn a profit. It's a tough time to be shelling out a ton of money to Apple. We'll have to see what they do. I think it's going to go to trial and be a very drawn-out years-long thing. That's what a lot of the lawyers I interviewed said as well. But I could see a world in which they just figure out a way to get all this money together and pay and maybe Apple accepts it. In the Samsung patent cases, they lasted forever. In the middle of it, Tim Cook was at a Code Conference and I asked him, "What are you doing? Is this accomplishing anything?" And he looked at me very seriously and he said, "Well, we think the fees for licensing standard essential patents are out of whack." And I was like, "That is not the reason you're doing any of this. That's not the point, the point is that you were mad and you wanted to run this lawsuit to ground and you're going to run this lawsuit to ground no matter what the nominal reason is." That feels like a big piece of the puzzle here. OpenAI has taken a bunch of Apple employees. Famously Jony Ive, Apple's most famous designer, is working with OpenAI on hardware devices. Tang Tan, who is OpenAI's chief hardware officer. He had a reputation at Apple for "playing fast and loose," that's from Mark Gurman at Bloomberg. He seems like the central character in the story, not so much Jony Ive, but Tang Tan. And that piece where it's a bunch of ex-Apple people maybe playing too fast and loose almost feels like it's personal, almost feels like there's a lot of emotions involved. Talk about Tang Tan and talk about what all these folks are alleged to have done that feels like it's a little more personal than your standard big corporate dispute. On what you said about talking to Tim Cook, I truly believe people underestimate companies' pettiness. We've seen it in recent years, like with the OpenAI-Elon Musk lawsuit. There are so many things that could have been avoided if companies weren't trying to just be petty, which is fine. They can do that, they have enough money to do that. But people underestimate how much that plays a part sometimes in these things. As for Tang Tan, yeah, he worked at Apple for 24 years. He was the VP of the Apple Watch. He left in 2024 to work on Jony Ive's hardware company, io Products, which obviously OpenAI ended up purchasing. OpenAI then appointed him as chief hardware officer. So he had a C-suite role at OpenAI, but this is after 24 years at Apple. According to Apple's lawsuit claims, he was the mastermind of a lot of this trade secrets gathering, regarding interviews that he would conduct and ask about secret code-named projects. And then the person being interviewed would feel like maybe they were able to tell him stuff because, oh, well, why would he know the name of this project or these details about it if he wasn't involved also? So, they felt they could speak more freely, allegedly. There were other times that he asked, "Hey, why don't you bring some batteries or other pieces of hardware outside the Apple office that you've worked on in the past so that we can do a show and tell?" It's very interesting to go through these claims. It just seemed like he really was not worried about what was going to come of this, if these claims are true. The other major character here is Jony Ive, Apple's very famous ex-designer who worked with Steve Jobs and all of those famous projects. I would say Ive reportedly has a very testy relationship with Apple. Now that he's left, he's certainly made that clear in various interviews and statements. And he's working with Sam Altman on new devices. He made a video with Sam Altman, which I can only describe as a romantic coffee date. Absolutely. In which they described the phone and the laptop as legacy devices. It was instantly memed. I have to say the memes were amazing. It's very good. And they shut down half of San Francisco to make it. I thought Ive calling the phone and the laptop legacy devices in that video was just a straight shot at Apple. These are the things that he made, that he revolutionized in many, many ways. And he's like, "These are over now." You can say a lot about whether that's true, whether that can come true, and I want to talk about that in a little bit. But it's notable to me that Jony Ive is not mentioned in this lawsuit. There's a line Apple wouldn't cross, and it's mentioning the fact that it's Jony Ive who went to OpenAI and started hiring all of his old designers, who sold a big portion of his company to OpenAI. And now, they're trying to make hardware and allegedly stealing trade secrets. But Jony Ive, he's not part of it. We're just going to leave his name out of it. Is that because he's too famous? Is that because it's too nuclear? Is it because he's still friends with Laurene Powell Jobs? What do you make of that? I think it may be more that he knew how to cover his tracks. It could be that he's too powerful or any of the things you said, but I really feel like it's just that he has other people doing his dirty work for him. The other stuff in this lawsuit is pretty egregious, and they've found it all. So if they found some really intense stuff on Jony Ive, would they really not put it in the lawsuit? There's some bad blood between them. I just feel like they would put it in there. This is just speculation, but when you're in a powerful enough role, you don't have to do all this stuff yourself. You have other people doing it for you and you also know how to cover your tracks. So, to me, maybe they just didn't have anything on him. Yeah, or he's distracted designing Ferraris no one likes or whatever it is he's doing, but he's not in this. I do think that's notable because the reason Sam Altman would hire Jony Ive is to make a credible claim to the next device. Whatever that category of AI-powered device is going to be, you hire the most famous designer to say, "I made the iPhone and I'm going to make this thing." And then it seems like OpenAI also wanted a bunch of Apple's know-how in order to make that thing. What do you make of that, that OpenAI needed hardware know-how from Apple? Or at least Apple alleges that OpenAI needed hardware know-how from Apple to make whatever the next thing is? To some extent, whether you're talking about trade secrets or just regular legal aboveboard know-how from hiring their employees, of course they needed it. They've seen a ton of hardware in AI crash and burn and they're trying to not become the next Humane AI Pin. It can be incredibly embarrassing to make an AI hardware device in this day and age. Chances are you're probably going to fail miserably and become a laughingstock. And so, if you want to avoid that, of course you need to get the best people on your side. Hardware is hard, as everyone says, so of course they want to get experts in there that have experience actually being incredibly successful at hardware. That's not surprising to me and I think it's a smart decision. OpenAI has demonstrated in the past -- and this is typical of every tech company, it's not just OpenAI -- that sometimes they're a little bit disconnected from what the consumer actually wants. You roll something out, no one really wants it. Okay. With software that's a little easier to pivot from, as we've seen from OpenAI deleting its side quests and stuff. They're like, "Oh, we're not doing this anymore. We're not doing this anymore. We're rolling this into that." With hardware, you can't do that. You'd better have it right from the get-go. I'm glad you said consumer, because that brings me to what I think is the heart of the matter for OpenAI, which is that it was going to be the consumer AI company, Anthropic famously focuses on enterprise and it's been lucrative for them; maybe that's where all of the money is. But OpenAI was going to take down Google, maybe through Bing, maybe through its own app. It was going to be a consumer company. The only reason you would make hardware is to go attack the consumer, to go attack the iPhone. So, OpenAI's ambitions, at least as I could see them, were first to take market share from Google, which is one of the most lucrative businesses in the history of the world, and then to go attack the iPhone, which is the most famous and culturally dominant tech product that has ever existed. I don't know how it can do either of those things. It doesn't seem like consumers even want these products or want AI at this scale. I don't know where that revenue comes from in consumer, and the college students are all booing AI at graduation. Does OpenAI just need to pivot to enterprise? Does it need to spend its time spinning its wheels at consumer hardware devices before it figures out its business? OpenAI has pivoted so many times internally. Its most recent pivot was that it was going to focus on its key revenue drivers, which are enterprise and coding. They've said that a million times. OpenAI folded Sora, Atlas, the sexting feature. It feels like years ago, but it's crazy that that was in the past year. They've done a lot of this, and so, everyone thought, "Okay, they're going for it, they're doing enterprise," because that's the tried-and-true money maker here, especially in a year that they're going to IPO. To be fair, yes, they had already planned to do the hardware device before this whole pivot and cutting out the side quests. I guess they can't afford to cut out this potential side quest because they've already spent a lot on it, it's happening no matter what. So now they're just trying to make it as successful as it can. I've only been on the AI beat for six years. That is a long time in AI, and maybe I'm missing something, but I just do not see a market when everyone is buying an OpenAI hardware device. If I'm wrong, we can come back on here and laugh at my clip from July 2026. A smart speaker, okay, maybe people buy it just to be a smart speaker like Google Home, that's what I use mine for. I think it's going to be one of those things that a few people really, really, really love and that the general public probably does not adopt because it's difficult to get them to adopt anything unless all their friends have it. There's a social aspect. You're going to be a laughingstock with green text if you don't have an iPhone. No hate to Android people, I'm just saying sometimes you don't get added to the group text or something. It's sad and it's not right, but there's got to be some public buy-in if you're going to be adopting a new piece of hardware a lot of the time. We founded The Verge at the start of the smartphone boom. Just thinking back on it, it was never a question of whether people would adopt smartphones. That was obvious. It was obvious to us, maybe it wasn't obvious to everyone, but we were in it and the only thing that wasn't obvious was who would win. After a while it became obvious that Apple would win. How many iPhone killers did we cover 15 years ago? And they all came and went, and they looked like new operating systems. Windows Phone existed. The Palm Pre ran an operating system called webOS. Android was ascendant. Nokia tried to do its own thing and then they pivoted to Windows Phone. At the end of the day, we ended up with iOS and Android and everything else fell into line. Maybe the whole tech industry hates this and they hate paying the App Store fees, but this feels like that same kind of moment where OpenAI is going to put out a hardware device, it's going to run its own operating system. Elon Musk is fulminating about Starlink and xAI putting out their own phone, maybe running their own operating system, apparently the run-up to IPO, they were showing it to people. I just have really dumb questions that, to me, mirror the same questions we asked about new smartphone operating systems 15 years ago. Are you going to make a Gmail client? Is it going to have Instagram? Because if you don't have those things, you don't actually get to replace the phone. And if you don't replace the phone, well, I've got the beta of iOS 27 on my iPhone right here and Siri AI is definitely good enough to just get through the day. That's what really gets me here, because the smartphone replaced the dumb phone. So okay, you've got to have something way better than the smartphone. Are you going to? Doubtful, but we'll see. But the other thing that gets me here is how many devices OpenAI is reportedly working on. Reportedly it's five hardware devices, and the screenless smart speaker is the first one. How can they come up with five? That's what I want to know. What are the five? And shouldn't you be putting all your resources toward one? It's already hard to make one. I'm a little dubious of five successful AI hardware devices. Even one is a long shot, but five is a little bit crazy. I'm sure there's a lot and some will come and go. The thing that I think about, particularly when it comes to Jony Ive and his approach to hardware -- which is familiar at this point, we've watched him launch a lot of hardware at Apple -- is Ive tends to focus on new input methods for new devices. The iPod had the click wheel and that really defined the form and function of the iPod. The iPhone has a multitouch screen that really defined the form and function of the iPhone and then the iPad. If you'll remember the Apple Watch, they launched it with great fanfare about the scroll wheel on the side. I don't know if that came to pass, but they really thought that was a big deal when they launched the Apple Watch. This is Ive's go-to path: "We find a new input mechanism, we're going to define the product around it." I know exactly what that should be for AI -- it's a natural language input. You can just tell the computer whatever you want and it'll figure it out and it'll go off and do it for you. But we're however many years into the AI revolution?Three or four years into this version of it? And it doesn't quite work yet. I think this is why the AI devices keep failing, as you keep mentioning. Because you can talk to a Humane Pin all day and all night and it will pretend to understand you and then not actually be able to do the things on the other side of it. That feels like the problem in AI right now. There's these flashes of brilliance and then there's these limits of capability. Where do you think we are in that process of figuring out exactly what it can and can't do? And how do you think that limits a hardware device? We're still in the midst of it. I personally use AI all the time, obviously in my personal life to test things out, see what it can do. Month to month, I see how it's improved, at least from my own personal experience, which is all anecdotal. But just the other day I was trying to look up a lot of addresses of companies because I wanted to map something out. I would say maybe 60 percent of the ones I looked up were completely wrong, just wrong. It made me a whole table. And it was like, "Yeah, don't worry, all these are definitely correct." And then 60 percent wrong. I'm like, "A lot of these are wrong." They're like, "Oh, sorry, my mistake." Yeah, my favorite. It's like, "Oh yeah, you're right. You caught me." It's right about a lot of stuff a lot of the time. But as we all know from when we were an intern back in the day, or if we've ever had an intern, there are certain things that are just easier to do yourself if you're not 100 percent sure the person is going to get it right. So what I wonder is, for a hardware device like this, there are a lot of low-stakes questions you can ask it and it'll be fine. But for higher-stakes things, it's simpler to just look it up yourself or do it yourself even than put it out there when it's going to be a potentially wrong answer. Is this going to end up like a Google Home situation, where you're just using it as a speaker and you're asking it what the weather is because it doesn't really matter that much if it's wrong? But as we know, it can only really be super useful if you can trust it with those higher-stakes types of questions. And so, saying, "Hey, what time does Emily's flight get in tonight because she's staying with me? What flight is she on?" Or, "Is it delayed?" If it gets that wrong, okay, I'm not going to be ready for her to come in from the airport. This does seem like the core problem. Will there be enough progress? Certainly the industry will claim that it's made great progress on hallucinations. Whether that's the lived experience of people who use these products, I think that's up for debate. But the industry claims they've made great progress here. The other piece is, will OpenAI have access to all of your data and personal context to make this useful in an environment with a smart speaker, where you can just say whatever you want to it? That, again, brings you back to whether it's going to have a Gmail client. Where's the Gmail client going to run? Are you going to let OpenAI log into your Gmail, so when you ask for flight information, it can go look at it? Or are you just going to default to opening Gmail on your phone and asking it because Google already has it? This seems like a version of competition that really depends on how comfortable you are handing over all of your data to various AI providers. And I'm just not sure OpenAI is that one. The other part of this is that -- and obviously this is a vocal minority here, it's not like the majority of OpenAI users -- a lot of people are extremely worried about ads. Anthropic capitalized on that with its Super Bowl ads that were anti-AI ads. OpenAI has been dealing with that fallout and just trying to say, "Hey, don't worry, we're not going to influence answers, we're just going to raise a similar ad underneath the answer." But it can be unnerving, whenever I use ChatGPT and an ad surfaces. It just makes me feel like it's less private. It's just a little bit strange and I feel like everyone gets that unnerved feeling. Even if it's not affecting the actual answer, it's still reminding you that it's not a space where they're not trying to sell you something. Someone is always trying to sell you something. There's already a lot of loss of trust right now in AI labs, if anyone trusted them to begin with. Right now, it's at an all-time low. We're seeing the rise of AI populism. We're seeing lots of death threats against AI CEOs, as The Wall Street Journal covered the other day. There's a lot of backlash, like you were saying about college kids booing AI at graduations. We're seeing a huge backlash right now, and I just think it's a strange time to be releasing a public-facing, "every consumer should buy this" AI hardware device. That connects to a bigger issue for OpenAI in this Apple lawsuit, which is that the AI industry right now is basically built on unauthorized taking. I'm saying that instead of theft because there are a lot of lawsuits. I know our audience wants me to just call it theft and maybe it is just theft. And maybe we can just say that when we get to the end of the road of 10,000 different lawsuits. But that part of the AI industry feels like we have to studiously ignore it. There's a trillion-dollar question over whether training data is fair use that is as of yet unresolved. We can just go down the list of lawsuits where all of these companies have to defend themselves about training data. And if they lose any one of them, maybe this whole industry cost structure falls apart. The inputs to AI right now are free. They just took the internet and they took all the books. We just saw, as a result of a hack, that Suno had to basically admit that it had scraped all of the music off of YouTube illegally. It just didn't have permission, and I think YouTube feels a certain way about that and certainly the artists on YouTube feel a certain way about that. Here's Apple saying OpenAI also took its hardware designs and its manufacturing know-how. It didn't have permission for that either, those are Apple's secrets. OpenAI hired people and they concocted this scheme to take all of that stuff without permission. Again, culturally, this just feels like part of the AI industry to me, that they think they can just take everything to build super intelligence as fast as they can. And once they get there, all will be forgiven. But the public doesn't seem to like it. Certainly, artists and writers and musicians don't seem to like it, and now Apple doesn't like it. It feels like this lawsuit is going to be a proxy for that as much as anything else. Can you take all this stuff without permission? I'm not sure OpenAI has the cultural capital to fight back. What are they going to say? It's really ironic that this whole industry is only possible because of the amount of data it's consumed, whether aboveboard or not. And AI labs, as well as just tech companies in general, get so litigious when others take that information elsewhere. So this whole thing is pretty ironic. The AI industry is really famously cliquish. It's almost incestuous, it's like you work with the same people here, then you depart and go elsewhere. Then that same company buys your start-up that you created and then you leave that start-up to go somewhere else and you get acqui-hired by your old friend that worked at this other place. A lot of industries are like that, but this industry specifically is so much like that. And so yeah, I think it's a bit ironic on both counts. People are going to leave Apple, and okay, they're going to take some trade secrets. Was this incredibly egregious? Yes, some of these claims are crazy. But also, like you were mentioning, a lot of the reason that any of these companies are even successful in the first place is because of all the unauthorized taking they've done. It's an interesting time to be watching all this play out. All the AI companies get really mad when, I don't know, Chinese AI companies distill their models. I'm just thinking about a jury and how Apple will play this case to a jury and be like, "You stole all the music, didn't you? And then you also stole our manufacturing designs. And don't you get mad when the Chinese companies distill ChatGPT?" In the course of your reporting, does it ever occur to the people in the AI industry that being mad about distillation is the exact same feeling that artists and musicians have about all of their work being put into the model in the first place? I haven't seen any of them even acknowledge that or at least even hint toward it one time, which is crazy. It just feels like there's a disconnect there. They get so, so angry about distillation, they're saying, "It's against our terms of service!" They can't even say it's illegal, just against the terms of service. They write open letters to the government. They even come together with their mortal enemies and other AI labs to unite against distillation. So, it's just interesting to me thatI've never seen that occur to them. I know a lot of people are probably listening to this and that they're mad at me, and mad at us, for not making the claim that Apple is just filing this lawsuit because it was behind in AI. It missed with Apple Intelligence, it took a long time to catch back up, it's only shipping it now. It had to go to Google and distill Google's Gemini models and put them in its new Private Cloud Compute system, and all the stuff that it needed to do. But that is shipping now. Do you feel like the broader AI industry is just looking at Apple lashing out at being late? Because I have heard a lot of glimmers of that, that this is just Apple trying to slow down the biggest threat in consumer as it launches Apple Intelligence and tries to catch back up. That could be definitely part of it. Everyone knows Apple has been famously incredibly behind in AI and it's been a big topic of conversation and an embarrassment for the company for years. So, that could definitely be part of it. But this lawsuit is not about someone "stealing trade secrets" for Siri. It's about hardware, specifically "show and tell" of hardware, things like that. Hardware is something that Apple does amazingly and they are pretty much by all accounts the best at. So, I think some people are thinking that. It's a benefit for Apple if they're able to kneecap a competitor from pulling ahead in any way. But the fact that this is a trade secrets lawsuit about hardware specifically I think has rolled back a few of those claims; it's not like they're trying to claim that OpenAI is stealing Siri AI's secrets that it may not have many of. [Laughs] They're like, "Please take everything we know about Siri AI. That will truly kneecap you." Apple can afford the distraction, you've mentioned this already in this conversation. Apple can just hire a bunch of lawyers and set them off to be as tenacious as they want. Maybe the rest of Apple won't even notice that that's happening, because they're busy making the next iPhone. Apple spent however many years and like $10 billion trying to make a car and it just didn't work. It didn't even occur to the rest of Apple that was happening. They just kept shipping phones and laptops and everything was just fine. OpenAI is not that company. OpenAI might not even have enough executives to absorb the cost of another distraction. They keep leaving. Greg Brockman, who's the president of OpenAI, seems to be running the entire company himself. As you've been reporting on the story, has it occurred to OpenAI that they're going to need more people to do more things? Because I look at that company and they just keep shedding all of their talent and pivoting, as you said, from one thing to the other and they've landed on "we need to compete with Anthropic." But it doesn't seem like they can afford distraction at this scale in any way, shape, or form. They can't. This is like the final battle. Actually, there are going to be a lot more battles, but this is a key battle in the longstanding AI arms race. This is the IPO year. Things are coming to a head. Investors are looking very closely at these companies in a way they haven't before. They're looking for them to turn a profit, or at least have a way to turn a profit in a way that they have not really paid too much attention to before, and it's all coming down to the line. They cannot afford a distraction right now. They are reshuffling, restructuring, changing executives around. When I've asked them about this, they will say, "Well, it's all been one large plan that we've just been doing in little pieces. It's not like we've pivoted a million times, we've always been going towards one thing and these are just different steps along that journey." But it doesn't always read that way to the general public. In some ways, yes, Greg Brockman is taking control of product. That's because Fidji Simo, the AGI chief, took leave because of her health and then she left permanently because of her health. So, it's not all things that the company could control, but I do think there have been a lot of defections even from the rank-and-file staff. They've got to get more people. They've got to hire more, which will require even more money, and it's not the time to get distracted by anything. It's worth noting that there's some reporting saying OpenAI will delay its IPO. And as you and I are sitting here speaking, SpaceX's stock price has dipped below its IPO number. These mega IPOs, they're in some kind of danger. It might not be a good idea to do this, especially if you don't have the revenue or, more importantly, the profits to back it up. Do you think there's some risk that this lawsuit is the straw that pushes OpenAI to delay its IPO? Absolutely. Reporting showed that Sam Altman was originally worried about filing its Form S-1 before Anthropic. Then it didn't do that. Anthropic did it first and then -- and this is me just speculating -- it seems like after Anthropic won that part of the race, OpenAI backed off and said, "Okay, well, should we actually do this right now? We were trying really hard to win, but let's look at the facts here." That's why it said, "Okay, it might be early next year, it might not be this year." That was before Apple's lawsuit dropped. So now of course I'm sure OpenAI is thinking, "Okay, should we delay it even more? Especially because there's no way we're going to beat Anthropic to an IPO." It seems like that might be a smart idea. If you can put out a great hardware device and make some big splashy profitable entry into the consumer market, that's a good story to tell in an IPO. But if you can't do that because everything you do is going to end up in litigation or in messy discovery on the way to litigation, maybe that all just has to be set to the side. That's pretty much my last question here. I feel like my thesis on this show and on The Verge generally has been, "Okay, I understand how this is going to work for software development and I understand how this is going to work in enterprise, although even that's pretty shaky still. But consumers don't love this stuff." That there are 900 million free ChatGPT users is not a reflection of anything other than, well, Google Search got really bad and this thing will tell you it loves you. But it hasn't turned into, "We should build more data centers." It hasn't turned into, "We culturally love the products of AI." It's turned into, "Get this slop out of my face and we're going to boo you at graduation and we're going to come to the town board meetings and say we don't want data centers." There's some huge gap there. Do you think OpenAI can close that gap? Because it has always been the company chasing the big consumer product vision, the big consumer market. If it can't close the gap, it should just shut it down and compete with Anthropic for enterprise uses. I don't know which one it's going to be. Do you have a sense through all this reporting if OpenAI has realized how existential the consumer side of the debate is? I think they know to some extent, but not the full extent. tThey will get at it in speeches, in research papers, in tweets. They have some PR lines where they will acknowledge that this is a thing, but I just don't think they realize how deeply this crevice goes. The gap is so wide. I don't see them being the only company to close it -- if it's ever going to be closed. People are extremely worried about so many things when it comes to AI and they're very emotional about it. It's not just logic. I think if it was just a logical gap -- some people logically think it's not good, some people logically think it is good -- I think they could probably close that. But when emotions come into play, no, I don't think that they will be able to fully bridge that gap. For me, when I became an AI reporter six years ago, none of my friends really knew or cared what I wrote about. That was fine. It was really niche, whatever. Starting four years ago, it would come up at the bar, at the club. I'll be walking down the street, someone's asking me about it, and they don't know I'm an AI reporter. So, when they learn I'm an AI reporter, it happens even more. But just randomly, this is coming up for people and making them extremely emotional. So yeah, I just don't think OpenAI is going to be the company to bridge that gap. We'll see what happens with the hardware of it all. A lot of people I've been seeing -- TikTok creators, creators on other platforms -- are trying to change the narrative here, saying, "Hey, don't get left behind. Learn how to use this stuff." And it's something that can be valid, but the way that they're framing it a lot of the time is more, "Oh, it's such a high learning curve. You must learn how to use it before it leaves you behind." It's not that high of a learning curve, it depends on how you're using it, but you know what I mean. Sometimes it is, yeah, if you're using Codex and doing all sorts of intense vibe coding, yes, of course it is. But if you're just chatting with a chatbot, it's really not a high learning curve. I personally believe all that algorithmic social video content is an astroturfing campaign. That's just me. That's a conspiracy theory, we're going to leave that aside. I do want to pitch you a video series called "Hayden in the Club," where you just go to the club and talk to people about AI. [Laughs] I would love to do that officially instead of just having it happen to me unofficially all the time. It's been a long time since I was in the club. That was not what the club was like when I was younger. Things have changed. Hayden, this has been great. I have a strong suspicion you're going to be back on this show talking about this lawsuit and OpenAI for the rest of this year. We're going to have to have you back very soon.

AI companies are trying to escape the screen. Apple's lawsuit against OpenAI shows how hard it will be

OpenAI, the company behind ChatGPT, has been a key player in the current wave of consumer artificial intelligence (AI) flooding the world. But so far it has all been software behind a screen. Last week, that began to change: the tech giant released its first branded hardware. At the same time, it was sued by Apple - legendary for its hardware nous seen in devices such as iPhone and MacBooks - over alleged industrial espionage. In response, an OpenAI spokesperson said, "We have no interest in other companies' trade secrets." The lawsuit is about more than allegations of stolen manufacturing techniques. It's a preview of a much bigger shift. AI companies are trying to escape the chat window and move into the physical world. But as OpenAI is discovering, hardware plays by rules software companies aren't used to. A device of their own OpenAI ignited mainstream interest in large language models with the release of ChatGPT in late 2022. The product improved quickly, but the user interface has still mostly been confined to a text box. OpenAI's software has had to run on devices such as phones, laptops and desktops built by other companies for other purposes. OpenAI has signalled for some time that it wants its own hardware. It hired Jony Ive, Apple's former chief design officer, to lead a hardware effort. Last year, in a promotional video, OpenAI boss Sam Altman and Ive discussed, at length, the fact they would soon be working on hardware. OpenAI does hardware - but starts small Last week, OpenAI launched its first hardware device. It's not the vaunted Ive collaboration, but instead a tiny keyboard. The Codex Micro is a little box co-developed with electronics company Work Louder, featuring six illuminated keys that indicate the status of a user's AI coding agents. Green means an unread message, blue shows the agent thinking, orange is asking for approval, and red represents an error. Non-glowing, blank white means the agent is idle. It's a modest debut, but the initial run of US$230 devices quickly sold out. However, it's far from the leap in human-computer interaction OpenAI has been promising. Nor is it the product at the centre of Apple's lawsuit. Instead, according to reporting responding to the lawsuit, OpenAI's Ive-Altman device will be a portable "thing" you tote along from room to room. It will sense through a speaker and camera, but has no screen. Parts of it will move by themselves, "creating a sense that it is alive and not just an object responding to commands". Intimate, not inanimate To understand why OpenAI's device moves on its own, it helps to start with an animated desk lamp. Pixar's iconic Luxo Jr. lamp mascot never gained a face, a voice or a human body, yet audiences have little trouble reading it as curious, playful or dejected. Those qualities come entirely from movement, posture and timing. A handful of carefully designed physical cues turn this ordinary object into something people relate to as a social being. This tendency has a name: anthropomorphism. In 2003, human-computer interaction researcher Brian Duffy argued that anthropomorphism helps people make sense of unfamiliar technology by letting them apply the social instincts they already use to read other people. These design choices are based on how humans perceive "apparent behaviour". Apple has tested this idea in its own labs. A 2025 research project called ELEGNT built a lamp-like robot and compared two ways of making it move: purely functional motion versus motion designed to also express intention or emotion. The expressive movements measurably increased how engaged users felt with the robot. It is this type of hardware that will allow AI to escape the screen. The death of social media and the rise of social machines Apple's lawsuit a signal of where the industry is heading next. The buzzword of the week in Silicon Valley is "physical AI". This is the idea that artificial intelligence is moving into the physical world, through devices that can move, listen, watch and respond to the people around them. That shift intersects another. Researchers have argued that social media platforms have shifted away from enabling reciprocal interaction and toward algorithmic broadcasting and parasocial observation, prompting some to describe social media as no longer particularly social at all. So what will replace that social function? The industry is betting it could be a new kind of AI-powered companion: one that attentively reads a child a bedtime story, or a device that keeps "eye contact" with you as you chat about your day. The cultures of software and hardware The lawsuit also exposes a culture clash between software and hardware. Software companies have largely been built on the premise that information should flow freely - open source, Creative Commons, "move fast and break things". Hardware has run on different rules. Competitive advantage there is harder to copy and slower to build. It is embedded in manufacturing processes, supplier relationships, proprietary materials and decades of accumulated engineering knowledge. For example, Apple's modern supply chain, built over more than three decades, is an asset in itself. The complaint against OpenAI cites, among other things, a proprietary metal-finishing technique that OpenAI allegedly obtained by misleading one of Apple's own manufacturing partners (an allegation OpenAI rejects). That's the deeper tension the case exposes. AI companies have built their businesses on the idea that knowledge should circulate. They have trained models on the open web, argued for expansive interpretations of fair use, and treated information as raw material to be remixed into something better. But as those same companies move into physical products, they are running into an industrial world where intellectual property lives in material, people, prototypes, production techniques and supplier relationships. The irony is hard to miss. AI companies' assumption that letting knowledge circulate can make them more valuable runs against Apple's complaint that the opposite is true: their knowledge is valuable precisely because it doesn't circulate.

Sam Altman and Jony Ive formed a dream team to reinvent hardware. Now it's at the center of a battle for OpenAI's future | Fortune

As Jony Ive and Sam Altman hugged and sipped espressos at a picturesque North Beach cafe in May 2025, a new war was brewing. The coffee date was featured in a viral video to announce that Altman's OpenAI was acquiring io Products, a small hardware startup founded by Ive, the legendary designer of the Apple iPhone and perhaps the world's most famous tech product designer. Their alliance signaled a brazen ambition to build the next great consumer product -- this time for the AI age, and a bet that OpenAI, the maker of ChatGPT, could unseat the likes of Apple using the iPhone maker's former design star. Now, before any products have even been released, a scorched-earth lawsuit from Apple that accuses OpenAI of trade secret theft has thrown those plans into chaos, raising the stakes for the AI startup -- and Ive -- to deliver a flawless, high-profile hit device. OpenAI's device, expected to ship as early as next year, is still something of a mystery. A recent Bloomberg report citing anonymous sources described it as a home-speaker-like device that will serve as an active AI companion and feature moving mechanical parts designed to mimic human behavior. A source familiar with OpenAI's plans told Fortune that the design of the initial hardware device has been finalized, while work on a broader family of AI devices proceeds. Success is hardly guaranteed. Building hardware as a company with zero track record is hard enough, and inventing an entirely new class of device for AI is a goal that has already humbled some startups and burned hundreds of millions of dollars in investors' cash. For OpenAI, the move into hardware is being driven by more than just a desire to sell a hot gadget. With the 11-year-old organization no longer the undisputed leader in large language models, hardware represents a strategic, maybe even critical, evolution of its business -- a way to put its AI models in the hands of consumers and lock them in, giving them a reason to use OpenAI's models even if they aren't clearly better than rivals' and ensuring that competitors can't cut off the path to those users. "They're being forced to build hardware because it gives them more control over the user experience," said Anshel Sag, a principal analyst at Moor Insights & Strategy who specializes in spatial computing. "The biggest challenge that OpenAI has is delivering on something that is compelling enough to get people to actually buy it." Ive, of course, built his legacy at Apple on an obsessive discipline: perfectly made products, developed in tandem with Apple founder Steve Jobs. The question now is whether Ive can pull off another feat of product design magic for a different fast-moving tech company. That would be challenging under the best of circumstances. Apple's lawsuit threatens to derail the project. Two hubs, one vision In the roughly one year since OpenAI acquired Ive's io Products for $6.5 billion, the io team has been integrated into the parent company as the OpenAI hardware group. While OpenAI's leadership and the majority of its staff work out of the company's headquarters in San Francisco's Mission Bay district, the hardware team, which is now more than 400 employees, works out of the original io building in Jackson Square, a charming neighborhood of brick buildings and upscale furniture and design shops on the other side of town. While Ive is not technically an OpenAI employee, he is spearheading the project, collaborating with the hardware team -- who are now full-time employees of OpenAI -- while also continuing to lead his standalone design firm, LoveFrom, which is providing the design services and setting the aesthetic for OpenAI's family of devices. The structure means that OpenAI's hardware products are effectively being shaped by multiple teams and organizations, bringing together some of the world's top talent across fields like mechanical engineering and industrial design, but also creating risks of clashing visions and cultures, as well as challenges in overall efficiency. People who have worked with Ive told Fortune that he is charming and deeply diligent about his designs and cares greatly about his reputation and which projects carry his name. "He's that kind of designer. He will be laser-focused, so he basically hasn't got time for anything else," said Clive Grinyer, who has been friends with Ive for decades since they worked together at the design firm Tangerine in London, before Ive went to Apple. When Grinyer spoke to Ive a few weeks ago, Ive said he was "very, very busy." At Apple, Ive had very high expectations and pushed the design studio team further than many thought was necessary at the time, recalls one former colleague who worked with Ive at both Apple and LoveFrom. But the end product was always better, they said, and Ive was very well liked, especially for shielding the group from broader internal pressures around things like cost and timelines. According to some former Apple executives, Ive's commitment to loyalty mirrored Apple's fierce corporate culture, in which defections to rivals were treated as treasonous. By some accounts, Ive and Altman have a genuine friendship. Altman has spoken about meeting Ive's family, and Ive said his son, Charlie, was the first in his family to use ChatGPT and encouraged Ive to meet Altman. To keep each other abreast of the hardware progress and other business matters, Ive, 59, will trek to OpenAI HQ, and Altman, 41, will just as often visit Ive in his locale. Whether their partnership creates the same magic as Ive's nearly 15-year-long collaboration with Jobs remains to be seen. With OpenAI preparing for an initial public offering and locked in a fierce competition with other frontier model makers, Altman and the company's leadership have a lot of priorities competing for their attention. The race for the next device OpenAI is one of several major tech companies, including Apple, Meta, and Google, racing to create the next essential tech device by fusing AI and hardware together into a new class of gadget. Such devices have yet to prove themselves with consumers, and the path is already littered with casualties: highly hyped, AI-first gadgets like the Rabbit r1 and the Humane AI Pin flopped spectacularly on arrival. The Humane device, a voice-enabled AI assistant that clipped onto a user's shirt, was created by two former Apple employees and raised $241 million in venture funding. Because of limitations in mobile operating systems and cellular connectivity, tech firms are trying to crack how best to package consumer AI -- be it wearables, robots, or phones -- and how to get AI to run mostly locally rather than relying on outside connectivity. Another key challenge is privacy. Devices that record users in the home, as OpenAI's device is rumored to potentially do, are among the most risky when it comes to consumer privacy. "People wonder if an AI device is recording them or not, and it's really uncomfortable to have to ask that question," said Elena Wagenmans, co-founder and CEO of TAYA, which makes an AI-powered necklace that does not have an "always-on" mode and features other built-in privacy safeguards. OpenAI's Altman has described early prototypes of the device as "simple" and less distracting than a smartphone. "You trust it over time, and it does have just this incredible contextual awareness of your whole life," Altman said in an on-stage interview alongside Ive in November 2025. Given Altman's controversial reputation -- he was briefly fired in 2023 for not being "consistently candid" with the company's board of directors, and a lengthy New Yorker article this year raised a litany of questions about his trustworthiness -- consumers may have misgivings about putting an OpenAI AI device inside their home, no matter how slick a product Ive designs. "A beautiful object does not solve a trust deficit," said Gary Sheng, founder of the applied-AI agency Hyperagent Labs. The performance, and usability, of OpenAI's voice technology, including the newly released GPT-Live, will also be important -- with consumers sensitive to the right balance of usefulness and intrusiveness. Ive is said to be motivated, at least to some degree, by a desire to make amends for the negative societal side effects wrought by the smartphone, such as screen addiction and toxic social media. "I think he feels some responsibility for what happened with the iPhone," said Grinyer, the longtime Ive friend. "It became a gateway to this terrible world." Aside from the speaker device OpenAI is reported to be building, the company could also be eyeing a smartphone with AI agents replacing apps, industry analyst Ming-Chi Kuo reported earlier this year. Other products rumored to be in the potential suite of devices include AI glasses and an AI pin. Why hardware is notoriously difficult To build and ship a family of new devices, the Ive-OpenAI alliance will need to be hyper-focused, including assembling a manufacturing system from scratch. It's a tough task, and one that will be made all the more difficult as OpenAI fights Apple in court over the team it has assembled. Apple's lawsuit alleges two former employees now working at OpenAI unlawfully took confidential data, including information about vendors and contractors in Apple's supply chain, as well as details about unreleased hardware products and technical specifications. The complaint, which claims that more than 400 former Apple employees now work at OpenAI, names Tang Tan, OpenAI's chief hardware officer and a former vice president at Apple, Chang Liu -- another former Apple employee now at OpenAI -- and io and OpenAI. Ive is not named. OpenAI said in a statement that it is not aware of any evidence that Apple's allegations have merit and that it has no interest in other companies' trade secrets. "We believe in fair competition and allowing people the freedom to work wherever they choose," the company said. Saurabh Vishnubhakat, an intellectual property law professor at Cardozo School of Law, told Fortune that the lawsuit is more likely to "slow, compartmentalize, and reshape OpenAI's hardware project" rather than kill it outright. "The risk is that OpenAI ends up having to quarantine files or employees, redo engineering work, abandon a manufacturing process, or replace a supplier," he said. Care, craft, and complexity Delays can be costly, particularly with so much at stake. Still, despite the breakneck pace at which large language models and agentic AI are evolving, AI devices are still in the embryonic stage and very much undefined -- a fact that may play to Ive's strengths. At LoveFrom, Ive has sought to build a culture centered on care. The firm's name comes from a conversation with Apple's Jobs about the importance of making products thoughtfully. Its 50 to 60 employees in San Francisco often write each other thank-you notes and design small gifts for one another (a tradition carried over from Apple's design studio). The team includes designers, color specialists, and sculptors who physically build products from scratch. The design firm's most notable project outside OpenAI has been designing Ferrari's Luce, the Italian automaker's first fully electric car, which drew mixed reviews when it was unveiled in May. LoveFrom began the Ferrari project with months of research, producing four thick books on topics such as "speed," before designing the vehicle. Ive, who has described the design process as "unpredictable," has a history of playing with different styles. Although he championed a clean, minimalist aesthetic during his time at Apple, he embraced more ornate, decorative graphics that mimic physical objects after LoveFrom took on Airbnb as a client in 2020. "It's very easy to be different, but very difficult to be better," Ive is quoted as saying in the book Jony Ive: The Genius Behind Apple's Greatest Products by journalist Leander Kahney. To become a hardware powerhouse, OpenAI needs Ive to do both.

Apple Sues OpenAI Over 400 Allegedly Poached Engineers

Apple has filed a lawsuit against OpenAI, alleging intellectual property theft and unethical recruitment practices. The legal filing claims that OpenAI hired over 400 Apple engineers, some of whom allegedly had access to proprietary information, including unreleased product designs and manufacturing techniques. Apple also accuses OpenAI of organizing sessions where sensitive materials, such as internal documents and prototypes, were reportedly shared. AI Master examines the potential implications of this case for the tech industry, particularly regarding trade secret protections and the development of AI hardware. Dive into the potential financial and operational impacts this lawsuit could have on OpenAI, including its "Sweet Pea" hardware project. Explore how Apple's legal approach could influence recruitment policies and employee mobility within the tech sector. Additionally, gain insight into how this case might affect innovation timelines and competitive dynamics in AI development. The Core Allegations Apple's legal filing details a series of serious accusations against OpenAI, alleging that the company engaged in a deliberate strategy to poach over 400 Apple engineers. These employees, according to Apple, had access to sensitive and unreleased product information, which OpenAI allegedly exploited to gain insights into proprietary technologies. The lawsuit paints a picture of calculated efforts to undermine Apple's competitive edge. Key allegations include: * Unauthorized access to over 1,000 pages of Apple's confidential engineering documents. * Recruitment of employees with insider knowledge of unreleased product lines, such as the Vision Pro roadmap. * Deceptive practices involving Apple's manufacturing partners to obtain proprietary manufacturing techniques. Apple further claims that OpenAI encouraged unethical practices during recruitment, including "show-and-tell" sessions where candidates allegedly shared Apple prototypes and internal documents. If these allegations are proven, they could represent significant violations of trade secret laws, with serious legal and financial consequences for OpenAI. Evidence Supporting Apple's Claims To substantiate its accusations, Apple has presented a range of evidence that underscores the seriousness of its claims. This evidence includes: * Text messages and emails between former Apple employees and OpenAI recruiters, suggesting an intent to share confidential information. * Access logs showing unauthorized downloads of sensitive engineering documents shortly before employees resigned from Apple. * A "need-to-know checklist" allegedly distributed by OpenAI to guide engineers on avoiding detection while accessing Apple systems. Two individuals are prominently named in the lawsuit: Tang Yuan, a former Apple Vice President of Product Design and Paul Meade, a former Vision Pro engineer. Yuan is accused of leading recruitment efforts targeting Apple employees, while Meade is alleged to have brought detailed knowledge of unreleased product plans to OpenAI. These accusations, if validated, could significantly bolster Apple's case. Unlock more potential in OpenAI by reading previous articles we have written. Strategic Implications for Both Companies This lawsuit extends beyond a simple legal dispute; it represents a strategic move by Apple to disrupt OpenAI's ambitions in the hardware space. A key focus of the case is OpenAI's "Sweet Pea" project, a hardware initiative that could directly compete with Apple's AI-integrated devices. By pursuing legal action, Apple aims to delay or potentially derail OpenAI's progress in this area, safeguarding its own position in the market. The case also raises broader questions about the balance between trade secret protection and employee mobility in the tech sector. If Apple succeeds, the outcome could set a precedent that complicates transitions between competing firms, particularly for roles involving sensitive technologies. This could have a chilling effect on recruitment practices across the industry. Possible legal outcomes include: * A financial settlement requiring OpenAI to pay penalties and impose restrictions on its hiring practices. * A preliminary injunction that could temporarily halt OpenAI's hardware development efforts. * A lengthy legal battle that delays product launches for both companies, affecting their market positions. For Apple, the lawsuit represents an opportunity to reinforce its dominance in the AI hardware market. For OpenAI, the stakes are equally high, as the company's ability to innovate and compete could be significantly hindered by an unfavorable outcome. Broader Industry Context This legal battle unfolds at a critical juncture for both companies. OpenAI is preparing for an initial public offering (IPO), and any legal setbacks could undermine investor confidence. Meanwhile, Apple has recently shifted its AI strategy, replacing OpenAI's ChatGPT with Google's Gemini on its devices. This strategic pivot highlights Apple's intent to distance itself from OpenAI while aligning with other competitors in the AI platform race. The dispute also underscores the growing importance of AI hardware as the next frontier in technology. While software-based AI systems like ChatGPT have captured public attention, the hardware layer, where AI directly interacts with humans, is becoming increasingly vital. Control over this layer could determine which companies lead the next wave of technological innovation. Potential Outcomes and Industry Impact The resolution of this lawsuit could have profound implications for the tech industry. Potential outcomes include: * A financial settlement that imposes penalties on OpenAI and restricts its hiring practices. * Delays in OpenAI's hardware development, potentially giving Apple a competitive edge in the AI hardware market. * A prolonged legal battle that creates uncertainty for both companies, potentially affecting their innovation timelines and market strategies. Regardless of the outcome, this case highlights the high stakes involved in the competition for AI dominance. The rivalry between Apple and OpenAI extends beyond hardware or trade secrets; it represents a broader struggle for control over the future of human-AI interaction. As the tech industry closely monitors this legal battle, the implications are likely to extend far beyond the courtroom, influencing how companies approach innovation, recruitment and intellectual property protection in the years to come. Media Credit: AI Master Disclosure: Some of our articles include affiliate links. 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Apple paints a damning picture of OpenAI's interview process

Yesterday we brought you the news that Apple's relationship with OpenAI has turned ugly, with the Cupertino company suing the AI brand and accusing it of stealing trade secrets. And a closer look at Apple's filing reveals wild details about OpenAI's interview process that are huge if true. Apple says that OpenAI hired at least two previous Apple employees who continued to access sensitive information whilst working for the AI company. As reported by Moneywise, Chang Liu, a senior system electrical engineer at Apple for eight years, moved to Apple in January. "He discovered a security bug let him still reach the company's confidential hardware files, and rather than report it, he exploited it and coached a colleague still inside Apple on how to copy materials without tripping the security team." Tang Tan, who served for 24 years at Apple and was most recently vice president of the Apple Watch, moved to Jony Ive's io in 2024. That company was acquired by OpenAI last year. Apple's lawsuit claims that Tan solicited trade secrets during interviews with former Apple employees for roles at OpenAI. As reported by The Verge, one employee was asked about "a top-secret project for an unreleased new Apple product." Tan is also accused of asking former Apple employees to bring hardware components for "show and tell" sessions, with one message left on an Apple device suggesting Tan asked one candidate to ""bring some parts [she] worked on". Tan is also accused of asking them to prepare "Technical Deep Dive" presentations on hardware they worked on. Time will tell how the lawsuit plays out, but it currently paints a pretty damning portrait of OpenAI's, or at least Tan's interview process. In a statement to several publications, OpenAI spokesperson Drew Pusateri has said, "We have no interest in other companies' trade secrets. We remain focused on building innovative technology that empowers people everywhere."