Apple sues OpenAI, accusing 'theft of business secrets'

Apple on July 10 sued two of its former employees and OpenAI, claiming that taking advantage of secrets obtained from the company helped the AI ​​company penetrate the consumer hardware manufacturing field. According to Reuters, the move marks a significant escalation amid tension between the two businesses due to many issues.

"OpenAI stole Apple's trade secrets and confidential information at every level, from technical staff to hardware directors," Apple said in a 41-page application filed in a federal district court in California.

The iPhone owner accused 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.

"There is substantial evidence that OpenAI personnel stole confidential information about our unpublished technologies, processes and products," Apple said.

Two former Apple employees mentioned in the lawsuit include Chang Liu, a former senior intelligence systems engineer, and Tang Yew Tan, who served as vice president of iPhone and Apple Watch product design. Mr. Tan is currently the Chief Hardware Officer of OpenAI.

Apple said engineer Liu did not return the company-issued laptop and then took advantage of the authentication error to access the internal network, downloading "dozens of confidential hardware-related documents".

Meanwhile, Mr. Tan is accused of storing information about suppliers and aggregated data internally to benefit OpenAI before leaving Apple. The company also said that Mr. Tan encouraged employees to bring Apple components and devices to present at job interviews at OpenAI.

Tang Yew Tan mainly worked on iPhone during his 24 years at Apple.

Apple confirmed that it had contacted OpenAI since February to express concerns about secrets being leaked to the AI ​​company and asked the two sides to discuss, but received no response.

"More than 400 former Apple employees are working for OpenAI, it is not surprising that some people have access to confidential data. However, that does not mean OpenAI is allowed to use that information to accelerate its own hardware development process," the lawsuit reads.

OpenAI denies the accusations: "We are not interested in other companies' business secrets. OpenAI remains focused on building innovative technologies that benefit everyone."

Technology companies are in a race to determine who will lead the way in AI-enabled consumer devices, which may not use traditional operating systems and applications. Analysts believe OpenAI is developing its own phone or device, potentially becoming a direct competitor to the iPhone in the future.

According to AFP, the lawsuit will significantly complicate OpenAI's much-awaited IPO plan. The company is valued at about $852 billion and has raised more than $180 billion from investors. Expanding operations into the consumer equipment sector is considered a great opportunity to maintain growth.

The relationship between Apple and OpenAI has deteriorated over the years, as the race to develop AI products pushed the two sides to compete for talent and exclusive technology.

"Apple believes that OpenAI is shifting from partner to potential competitor, while OpenAI seeks to reduce dependence on the iPhone and build direct relationships with users. Even if the allegations cannot be proven, the lawsuit also risks delaying OpenAI's hardware ambitions and weakening the already fragile partnership," commented Paolo Pescatore, analyst at PP Foresight.

Mark Lemley, a professor at Stanford Law School in the US, said that Apple's actions could lead to a very large lawsuit, but some of the allegations are not illegal in the state of California. "However, OpenAI will face serious problems if Apple can prove the allegation that the former employee carried confidential information and that OpenAI was using those documents," he said.