Apple has filed a lawsuit against OpenAI and two former employees, accusing them of stealing trade secrets to help the ChatGPT maker expand into the consumer hardware market.
The lawsuit, filed on Friday in the US District Court for the Northern District of California, alleges that OpenAI orchestrated a broad effort to obtain and use Apple’s confidential information through former employees, recruitment practices and supplier relationships.
Apple claims the alleged misconduct was intended to speed up OpenAI’s plans to develop consumer hardware that could compete with products such as the iPhone.
Responding to the lawsuit, OpenAI said: “We have no interest in other companies’ trade secrets. We remain focused on building innovative technology that empowers people everywhere.”
The legal action marks a major turning point in the relationship between the two companies as competition in artificial intelligence continues to intensify.
Analysts believe OpenAI is developing a phone or another consumer device that could reduce its reliance on Apple’s ecosystem.
PP Foresight analyst Paolo Pescatore said: “Apple sees OpenAI moving from partner to potential rival, while OpenAI is trying to reduce its dependence on the iPhone and build a direct relationship with consumers. Even if the allegations are not proven, the lawsuit could delay OpenAI’s hardware ambitions and further weaken what is already becoming an increasingly fragile partnership.”
The lawsuit names former Apple senior system electrical engineer Chang Liu and former Apple vice president of product design for the iPhone and Apple Watch, Tang Yew Tan, as defendants. Neither immediately responded to requests for comment.
Apple alleges that Liu failed to return a company-issued laptop and later exploited an authentication flaw to access Apple’s internal network, downloading “dozens of Apple’s confidential hardware-related files.”
The company also claims Tan, now OpenAI’s hardware chief, “had been methodically using Apple’s confidential information to benefit OpenAI” before leaving the company by emailing himself information about Apple suppliers and internal industry summaries.
Apple further alleges that Tan encouraged Apple employees attending OpenAI job interviews to bring company parts for “show and tell” sessions. The complaint cites one candidate as allegedly saying he “didn’t even know we could take those from the office.”
The lawsuit also names OpenAI Foundation, OpenAI Group PBC and io Products, a company acquired by OpenAI, as defendants.
According to the complaint, Apple contacted OpenAI in February to express concerns that its confidential information had reached the company and requested discussions on the issue, but received no response.
Apple said more than 400 former employees now work at OpenAI, adding that while their employment is not unusual, “That OpenAI now employs people who were once entrusted with Apple’s trade secrets does not entitle OpenAI to use that information to jumpstart its hardware efforts.”
The iPhone maker also alleges that OpenAI employees sought confidential information from Apple suppliers, including asking one supplier to carry out what Apple described as a secret metal-finishing technique under the impression that Apple had approved its use.
Stanford Law School professor Mark Lemley said: “But if Apple’s claims that the employees took confidential documents with them and that OpenAI is using those documents are true, that is a problem for OpenAI.”
Rutgers Law School professor Camilla Hrdy said the case could become more complicated because most previous AI-related trade secrets disputes have centred on software rather than hardware.
“These trade secret lawsuits are frequently brought in the tech space, and we usually learn much, much more as the case develops. OpenAI is not a defendant that can’t afford to defend itself,” she said.
Faridah Abdulkadiri
Follow us on:
