Apple sues OpenAI for trade secret theft

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Big news. Apple has filed suit.

The complaint, lodged in federal court this Friday, accuses OpenAI of stealing proprietary tech secrets. But it isn’t just the company on the hook. Apple named two specific employees who left Cupertino for San Francisco.

Tang Tan. Chief Hardware Officer at OpenAI. He spent 24 years at Apple before making the jump.

Then there is Chang Liu. A software engineer with an eight-year stint at Apple behind him.

Apple says they found a pattern of theft.

“Protecting their work and intellectual property is something we took very seriously. Recently, significant evidence emerged suggesting individuals employed by OpenAi wrongfully took our secret and confidential information.”

This is unprecedented in the current hiring wars. Yes, tech giants poach talent like it’s the Wild West. People move from team to team in search of better checks, bigger roles. But actually suing them for handing over the blueprints to your next iPhone? That’s new territory.

It feels less like a job change now and more like corporate espionage.

The hardware angle

Why does OpenAI need this stuff?

They want to build physical devices. Not just code. Real hardware. AI earbuds. Maybe a smartphone.

OpenAI is burning cash fast. Subscriber money doesn’t cover everything. Hardware could be the lifeline they’re reaching for. It also creates a weird dynamic given they currently partner with Apple. Siri uses ChatGPT for the tricky questions.

Does that deal survive this?

Hard to say. Jony Ive’s io Products merged with OpenAI last year. Ive isn’t named in this suit, but the filing points to press reports about OpenAI’s hardware ambitions. Ive was right there in the mix.

OpenAI isn’t new to courtrooms either.

Publishers sue them over copyright scraping. Families sue over AI chatbots giving dangerous advice. Remember that mother whose daughter died after interacting with the bot? Yeah, that still hurts to read.

All this drama as they eye a public IPO. Apple’s lawsuit could muddy the waters badly. Especially if it stalls the hardware division.

“The tip of the iceberg”

Apple calls the accused behavior “the tip of the iceberg.”

In the filing, the details are grim.

Tan allegedly emailed himself sensitive supplier data right before leaving. He asked Apple employees, during interviews at OpenAI, about unannounced projects using internal codenames. Even worse, he reportedly told candidates to bring actual parts from their desks to the interview. “Show and tell,” he called it. To elicit more secrets.

Then Liu.

He kept his work laptop. Connected to Apple’s shared folders after leaving. Downloaded dozens of files. Engineering specs. Design docs. Proprietary project data.

Apple argues this misconduct is normalized at OpenAI leadership levels. They say OpenAI’s nascent hardware business is built on stolen foundation. “Rotten to its core.”

OpenAI denies it all, naturally.

“We have no interest in other companies’ trade secrets.”

Apple reached out back in February when they first saw the red flags. Asked how OpenAI planned to fix the security gaps.

Silence. No response.

So they went to court.