Why Is Apple Suing OpenAI?

Apple is taking legal action against OpenAI, after accusing the company of stealing trade secrets and confidential information relating to unreleased products and hardware development.

The lawsuit, filed in the Northern District of California, claims OpenAI employees and former Apple staff spent months collecting confidential information about Apple devices, manufacturing methods, suppliers and engineering work. Apple wants a court order stopping OpenAI from using any of the disputed information and is also asking for damages, with the amount to be decided during the trial. Let’s unpack what happened…

What Does Apple Say Happened?

Apple says its investigation uncovered what it calls a coordinated effort involving former employees who later joined OpenAI.

According to the lawsuit, OpenAI hardware chief Tang Tan, who previously worked at Apple, encouraged Apple employees interviewing for jobs at OpenAI to share information about products that had not been announced. Apple claims interviewees were asked to bring hardware components or discuss engineering work connected to batteries, logic boards, system in package technology and other unreleased hardware.

Apple also claims Tan used his knowledge of Apple’s departure procedures to help employees avoid security checks when leaving the company. The lawsuit says he shared an internal Apple document marked “Need to Know” that explained Apple’s security process for departing employees. Apple says messages recovered from company devices show the document was shared with OpenAI recruits before they resigned.

Apple said in a statement to MacRumors, “At Apple, our teams are constantly developing breakthrough technologies to create the best products and services in the world, and protecting their work and intellectual property is something we take very seriously.

“Recently, significant evidence has emerged suggesting individuals employed by OpenAI wrongfully took Apple’s secret and confidential information regarding our unreleased technologies, processes, and products. We will always defend our teams’ hard work and innovations, and we are taking all appropriate steps to do so.”

What Other Allegations Are In The Lawsuit?

Apple says its investigation started to notice a pattern of employees emailing confidential files to themselves before leaving for OpenAI.

The company also accuses former Apple engineer Chang Liu of keeping an Apple laptop after leaving the company and using it to download dozens of confidential documents during his time at OpenAI. Apple says Liu also stayed in contact with Apple employee Yu Ting “Alyssa” Peng, who allegedly shared updates about Apple projects, engineering work and supplier decisions. According to the lawsuit, after discovering he could still access Apple’s internal systems, Liu sent Peng a message saying, “LOL, I found out I can access the [network storage], so funny.”

Apple also accuses OpenAI of using confidential Apple information when dealing with suppliers. One supplier was allegedly persuaded to use what Apple calls a trade secret metal finishing technique after being told OpenAI had Apple’s permission to do so.

The lawsuit goes a lot further than accusing individual employees. Apple claims the behaviour was accepted throughout OpenAI’s hardware division. Court documents state, “This is the tip of the iceberg. Apple lacks visibility into what’s been happening behind closed doors at OpenAI, where such misconduct is normalized and exemplified by leadership.

“This much is clear, however: at every level, from members of its Technical Staff to its Chief Hardware Officer, and in coordination with business partners, OpenAI has been stealing Apple’s trade secrets and confidential information. As a natural result, OpenAI’s nascent hardware business now rests on the shakiest of foundations, rotten to its core by its illegal reliance on misappropriated trade secrets.”

Apple also says it contacted OpenAI in February after learning about the alleged theft, but claims it received no response before deciding to continue its investigation and file the lawsuit.

How Has OpenAI Responded?

OpenAI has rejected Apple’s claims; responding on X after news of the lawsuit became public, OpenAI Director of Strategic Communications Drew Pusateri said, “We have no interest in other companies’ trade secrets. We remain focused on building innovative technology that empowers people everywhere.”

The lawsuit does not name former Apple design chief Jony Ive as a defendant, despite his work with OpenAI, and it also does not accuse OpenAI Chief Executive Sam Altman of personally taking part in the alleged conduct.

In case you were as curious on this as I was, Apple also did it clear that its existing agreement with OpenAI for ChatGPT integration into Siri is not the subject of this legal action. According to the lawsuit, the dispute more so has to do with alleged trade secret theft and confidential hardware information, not the companies’ commercial partnership.

The case is now set to move through the courts, where Apple will need to prove its allegations and OpenAI will have the opportunity to defend itself.