What does Apple accuse OpenAI of?
Apple filed a lawsuit over the weekend in a federal trial court in California, accusing OpenAI of deploying a widespread campaign to seize and take advantage of its confidential information through former employees, recruitment processes and relationships with component suppliers.
"Losing trade secrets to senior employees"
The complaint most mentions Chang Liu, a former senior intelligence systems engineer who worked for Apple for eight years before quitting earlier this year; and Tang Yew Tan, who served as vice president of iPhone and Apple Watch product design. Mr. Tan served Apple for 25 years before leaving his position at the end of 2023, and is currently the Chief Hardware Officer of IO Products, a company founded by designer Jony Ive but acquired by OpenAI for $6.5 billion.
"Mr. Tan systematically used Apple's confidential information to profit for OpenAI," Apple's lawsuit said.
"Secrets are easily stolen"
According to TechRadar, Apple often requires new employees to sign a series of terms in a Confidentiality Agreement (NDA) that "makes everyone's hands tremble" when joining to ensure that commercial secrets are not leaked out. However, the lawsuit shows that stealing internal information is not too difficult.
Specifically, according to Apple, Mr. Liu did not return a company-issued laptop, did not respond to a request for an exit interview, or confirmed that he had returned all of his devices. However, the company did not check for a while until the problem was discovered.
Apple even said that after leaving, he was still in contact with Yu-Ting "Alyssa" Peng, who was then working at Apple. Ms. Peng allegedly "had extensive conversations with Liu about secret projects" without being detected.
Liu also allegedly used Peng's Apple-issued computer to infiltrate the internal network after realizing he could exploit a "rare, previously unknown authentication vulnerability." This person did the same thing on his unreturned computer. Liu even said he "felt funny" with his discovery.
According to the lawsuit, after hacking, he downloaded "dozens" of confidential hardware-related files, including "voluminous and detailed information about unreleased products, a series of technical presentations, specifications and proprietary project data". When Peng left Apple to join OpenAI in April, Liu helped her copy files without being detected by the security team, as well as instructing her to retrieve specific files and data.
"Shady" interview tactics
"More than 400 former Apple employees are working for OpenAI, it is not surprising that some people hold confidential data. However, that does not mean OpenAI is allowed to use this information to accelerate their own hardware development process," the application reads.
The lawsuit describes how, when taking on the position of OpenAI Hardware Director, Tang Yew Tan tried to get information from Apple employees during the recruitment process. The tactic given in each interview is to deliberately use stolen Apple project codenames to create trust, request to bring CAD designs and prototypes, and encourage disclosure of information about Apple's suppliers - a move that TechRadar commented as "the boldest".
The application also shows that an Apple employee was surprised by Tan's request and said "I didn't know I could get those things from the office". TechCrunch rates this as a "shocking allegation", showing Tan's recklessness in ignoring Apple's regulations.
Tan is also said to have instructed candidates not to say they were leaving "so they could stay at Apple as long as possible". Additionally, he advised that if Apple asks to sign anything during the exit interview, the first thing to do is "not sign" and "immediately notify" OpenAI.
"OpenAI used part of the stolen information"
Apple claims that IO Products "accessed, exploited, and used proprietary and confidential techniques, processes, and industrial design know-how related to metal finishing" by misleading its partners into believing they had permission to implement the technology.
Besides, according to Apple, OpenAI approached a company supplier using confidential information about the design and components related to the power supply and battery. Even to increase persuasion, OpenAI uses "internal terminology to ask specific questions that only people inside Apple know to ask."
"OpenAI's fledgling hardware business is based on an extremely shaky foundation, rotten to the core because of its illegal reliance on illegally appropriated trade secrets," Apple said.
Meanwhile, OpenAI representative denied: "We are not interested in other companies' business secrets. OpenAI is still focused on building innovative technologies and bringing benefits to everyone."
According to experts, Apple is taking the lawsuit very seriously by hiring Weil, Gotshal & Manges, LLP - America's leading law firm, which has participated in many complex and serious economic crime cases in history. Some analysts speculate that the lawsuit could shape the future of both OpenAI, Apple and much of the technology industry, according to Fortune. In the immediate future, many AI experiences on a series of products such as iPhone and iPad will change because they are using the GPT model.
Jim Cramer, a famous American presenter and financial expert, also believes that OpenAI may be the worse party when taken to court by Apple. "I feel like this is a heavy lawsuit, because it's not something Apple usually does," he said on CNBC's Squawk on the Street on July 13. "Apple has very good legal advisors. They don't tend to litigate just for the sake of it."