Apple and OpenAI are heading to court in a clash of two of the world's largest and most well-funded companies. With teams of lawyers and bottomless pockets to fund them, these two industry titans are squaring off over claims of theft of trade secrets. Apple is asking the courts to block its former employees from revealing information to their new employer and limit OpenAI's development of an AI device based on Apple technology. Unsurprisingly, OpenAI denies any wrongdoing and is asking the judge not to disrupt its business activities.
"Apple's getting this wrong" is the name of the blog post OpenAI posted in response to Apple's lawsuit. Although it begins by calling Apple one of the greatest companies of all time, it goes on to call the legal action "sad," suggests Apple mixed up Asian employee names, and doesn't want its trade secrets anyway.
OpenAI went on to publish text message chains and email correspondence, suggesting it's keen to be tried in the court of public opinion more than any other setting.
Hey, that's mine!
Apple alleges that as many as 13 of its former employees may have passed along sensitive trade secrets to OpenAI, including sharing details of unannounced products and sharing screenshots of confidential Apple documents. This is an expansion of its original claims from July, when it alleged two former employees may have shared confidential information with OpenAI. It has now filed a concurrent motion seeking expedited discovery, demanded that two former employees, Chang Liu and Tang Yew Tan, sit for depositions, as well as key OpenAI employees and representatives of OpenAI's hardware division, io Products.
Apple is also asking for a preliminary injunction, which would bar former employees from accessing, acquiring, or disclosing any confidential information about the company as the case proceeds.
Considering a case of this magnitude, between two companies with effectively infinite money to spend protecting themselves, that could take months or years to resolve, that preliminary injunction is key and could mean the lawsuit does enough damage to be effective for Apple's goals.
Regardless, OpenAI is in full revolt over the process and has posted not only a damning denial of all claims, but some evidence it feels exonerates its position, too.
Getting ahead of the competition
The cynical argument for this lawsuit is that it means the two companies are battling it out in a courtroom instead of in the consumer retail space. Apple is first and foremost a consumer device company, and to date, OpenAI hasn't competed there. But it's planning to, and its various hires from Apple and elsewhere, including buying up Jony Ive's hardware company, suggest it's going to release something with the kind of smart consumer focus that is typically Apple's bread and butter.
Apple might have been a little late to the AI game, but that's played to its advantage. But if OpenAI were to use its strong mindshare, deep pockets, and advanced AI model design and inferencing compute base to offer something targeting mainstream consumers, it's stepping on Apple's toes. This lawsuit could be a way to stop that in its tracks.
That's not to say the lawsuit may not have merit. The entire AI industry has used aggressively expensive hiring practices to try to get ahead. Meta spent $15 billion on getting Alexandr Wang and ScaleAI's data, and AI companies are reportedly hounding promising students years ahead of graduation to lock them into future contracts.
If you're building a smart consumer device, though? Grabbing ex- or even current Apple employees wouldn't be a bad way to do it. Especially if they brought along information on unannounced Apple products that may or may not be related to an AI consumer device.
First to market matters, too. Although Apple hasn't shown any AI-first standalone devices yet, if it were planning to, slowing OpenAI down with these injunctions might be enough to let it catch up or even get ahead.
Clock's ticking
For now, the lawsuit is very much he-said, she-said. Both companies have enough money and resources to make this fight messy, but what they don't necessarily have is time. Especially OpenAI. It's on the hook for hundreds of billions in compute investment, has just cut the price of some of its models, and has yet to post anything close to a profitable quarter.
Apple isn't quite so constrained, but is also seeing its traditional consumer base eaten by rapidly appreciating electronics costs. Apple already sells its products at a premium. But what can it do if prices for components push its products out of the luxury affordable into the truly unaffordable?
That may not happen, but it's a future it has to consider as AI, and the money spent on its promised future continues to have an outsized impact on global economies. The outcome of this lawsuit is likely to leave a mark, too.
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