Apple sues OpenAI for trade secret theft tied to AI hardware development (Bloomberg)

Apple has filed a lawsuit against OpenAI, alleging a 'coordinated campaign to steal information about upcoming products.' The Bloomberg report, authored by Mark Gurman, details Apple's accusation that OpenAI encouraged employees—including former Apple executives—to share confidential materials like components, drawings, and product details to aid the development of OpenAI's suite of hardware devices. After hours, Apple shares declined slightly, although not significantly.

The conflict centers around events beginning in 2019: Johnny Ive, formerly Apple's chief design officer, left Apple and later partnered with Sam Altman and other senior Apple designers and engineers to form I/O Products. I/O Products was designed to leverage OpenAI’s AI capabilities with Apple’s hardware acumen, aiming to launch new AI-powered hardware such as smart speakers, glasses, and earbuds. In 2023, OpenAI acquired I/O Products for $6.5 billion.

Apple alleges that both before and after the OpenAI acquisition, I/O Products engaged in seeking sensitive information through hiring and interviews, utilizing inside knowledge about unreleased Apple hardware to inform the development of OpenAI's competing devices. Apple claims it contacted OpenAI in February to halt such practices and prevent the use of proprietary information in their hardware, but received no reply. As a result, Apple is seeking a court injunction that would force OpenAI to redesign its products and delay their release, directly impacting OpenAI’s competitive positioning.

Despite the lawsuit, integration between Apple and OpenAI—such as ChatGPT embedded within Siri—continues for now, though Bloomberg has reported Apple is considering ending this partnership. Mark Gurman emphasizes the legal process is likely to be drawn out, potentially lasting several years, and notes that OpenAI has not yet commented on the lawsuit, which was only recently filed.