Apple sues OpenAI, two former employees for trade secrets theft
By Stephen Nellis, Deepa Seetharaman and Jaspreet Singh
Apple's Lawsuit Against OpenAI: Allegations and Industry Impact
July 10 (Reuters) - Apple on Friday sued OpenAI and two former employees, alleging misappropriation of its trade secrets to benefit the ChatGPT-owner's foray into consumer hardware, in a dramatic escalation of already simmering tension between the two companies.
Details of the Complaint
The complaint, filed in the U.S. District Court for the Northern District of California, alleges a coordinated effort to steal Apple's confidential information, including product designs, manufacturing processes and supply chain strategies.
OpenAI did not immediately respond to a request for comment.
Individuals and Entities Named in the Lawsuit
The lawsuit was filed against Chang Liu, a former senior system electrical engineer, and former Vice President of Product Design for iPhone and Apple Watch Tang Yew Tan, as well as OpenAI Foundation, OpenAI Group PBC and io Products. Neither immediately responded to a request for comment.
Specific Allegations Against Former Employees
Apple alleged that Liu failed to return a company-issued work laptop and later used an authentication bug to access Apple's internal network, downloading "dozens of Apple's confidential hardware-related files."
The iPhone maker also claimed that OpenAI’s hardware chief Tan had been "methodically using Apple’s confidential information to benefit OpenAI" by emailing himself information about Apple suppliers and internal industry summaries before his departure.
Recruitment and Use of Confidential Information
Apple alleged that Tan encouraged Apple employees to bring parts from Apple to job interviews at OpenAI for “show and tell” sessions, citing an incident in its filing where one OpenAI job candidate allegedly said that he “didn’t even know we could take those from the office.”
More than 400 former Apple employees now work for OpenAI, Apple said in the filing, saying that “it is not surprising” that some of them have knowledge of its confidential information.
“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 wrote in its complaint.
Alleged Supplier Involvement
Apple also alleged that OpenAI employees sought confidential information from Apple suppliers, at one point allegedly having one of those suppliers carry out what Apple called a secret metal finishing technique on the belief that OpenAI had Apple’s permission to use the technique.
OpenAI's Hardware Expansion
OpenAI bought hardware startup io Products, founded by former Apple designer Jony Ive, last year in a $6.5 billion deal, in a push to move beyond software into consumer hardware. Ive is not named in the lawsuit.
Tensions and Industry Context
Background of the Apple-OpenAI Relationship
TENSIONS BREWED FOR MONTHS
Tensions between the two tech companies have strained their relationship, as the race to develop AI products has intensified competition for talent and proprietary technology.
Correspondence and Legal Maneuvering
In its complaint, Apple claimed it wrote to OpenAI in February with concerns that its confidential information was making its way to OpenAI, asking to discuss the matter, but received no reply.
A person familiar with the matter told Reuters in May that OpenAI was exploring legal options against Apple, including notifying the technology giant of a breach of contract but potentially not filing a full lawsuit.
Recent Developments in Apple and OpenAI Collaboration
In 2024, Apple announced the integration of its "Apple Intelligence" technology across its apps including Siri and brought OpenAI's chatbot ChatGPT to its devices.
Their partnership allows users to access ChatGPT results through Siri, while iPhone users can also sign up for ChatGPT memberships directly from the iOS settings menu.
Apple rolled out a long-delayed overhaul of Siri last month. The update comes two years after Apple first promised major upgrades that were repeatedly delayed.
(Reporting by Jaspreet Singh in Bengaluru and Stephen Nellis and Deepa Seetharaman in San Francisco; Editing by Maju Samuel)
