‘Apple is one of the greatest companies of all time,’ says OpenAI

In an open letter, OpenAI this week turned to the court of public opinion in its existential war against Apple with a public notice in which the company refutes the iPhone maker’s claims concerning wholesale use of confidential information. You can detect the depth of enmity between both firms in OpenAI’s opening lines to its letter, which begins: “Apple is one of the greatest companies of all time,” and then moves swiftly into defending itself against company’s claims, while attempting to characterize Apple’s complaints as weak. What Apple claimed As reported elsewhere, Apple filed suit against OpenAI in the US District Court for the Northern District of California on July 10. The litigation names OpenAI Foundation, OpenAI Group PBC, io Products, Chang Liu (former senior systems electrical engineer), and Tang Yew Tan (former vice president of product design for iPhone and Apple Watch, now OpenAI’s chief hardware officer), and alleges breach of intellectual property agreement and misappropriation of trade secrets under the Defend Trade Secrets Act. The company has since then filed preservation orders to protect evidence.  Apple’s complaint is more detailed than that. Among many other things, it claims Tan allegedly directed job candidates still at Apple to bring “actual parts” to interviews for “show and tell” sessions. It also alleges Tan distributed an internal Apple document describing Apple’s own departure security protocols to new hires before they resigned. Liu is separately accused of failing to return an Apple laptop and using it to download confidential technical documents. OpenAI’s rebuttal Now, OpenAI argues Apple’s trade-secret lawsuit is based on factual errors, poor communication and misleading claims. It says Apple mistakenly contacted the wrong OpenAI lawyer after confusing two people with the same surname, falsely claimed a phone call had occurred, then acknowledged both mistakes without raising the allegations later included in the lawsuit. (Apple says it sent OpenAI a warning letter back in February with no response, which undercuts OpenAI’s “we offered to resolve this before litigation” statement.) OpenAI argues that Chang Liu was responding to requests from Apple colleagues seeking help locating Apple files, reflecting Apple’s own access-management failures rather than misconduct. It also claims Tan consistently instructed OpenAI staff not to seek or use competitors’ confidential information. OpenAI maintains it neither possesses nor wants Apple’s trade secrets, offered to resolve concerns before litigation, and finally argues that Apple’s request for a preliminary injunction is unnecessary and unsupported. What Apple might actually argue Will Apple see it the same way? That seems unlikely, in part due to the extent of the claimed infractions. Apple will point to the hundreds of former Apple employees now at OpenAI, including former Chief Designer Jony Ive. In doing so, it will likely argue that the remit of the case is not defined by erroneous legal correspondence, though that is probably seen as an error. Instead, the substantial claims it’s likely to focus on are that OpenAI has been engaged in a multi-front attempt to accumulate information pertaining to Apple and its design processes through recruitment and the way it recruits. It’s feasible both arguments have some validity. OpenAI might be right in pointing out weaknesses in Apple’s own approach to internal communications in terms of secrecy. And Apple is correct in pointing out that OpenAI moved to abuse those vulnerabilities, weaknesses in its approach that have only been identified during OpenAI’s campaign to grab secrets. While the Apple lawyer’s error in approaching OpenAI might be an unforced error that helps the AI firm cast doubt on Apple’s claims, it doesn’t necessarily invalidate them — and both sides believe themselves to be justified. Deciding which company is in the right will be a matter of law and not of public opinion. Which side does the smoking gun face? To prove its position, OpenAI shared some correspondence. These communications do seem to show a failure at Apple to properly implement device management over employee accounts, including the claim that personal iMessage accounts are routinely used to share corporate correspondence. That may be true, and shouldn’t be – it’s an obvious weakness in corporate security. At the same time, the correspondence also shows hints of job opportunities at OpenAI for and to a former colleague, which kind of proves part of Apple’s point in terms of steady employee poaching. “I can always give you some fun side projects,” one message said.  Of course, interaction between former colleagues is inevitable,. But at the level of seniority here, it feels plausible this could be in breach of any off-ramping arrangements reached between Apple and its former employees. No doubt, courts will decide that – though it does underline Apple’s claims that OpenAI instructed former Apple staffers about how to leave without reaching such agreements. “This isn’t Apple getting it wrong. It is OpenAI getting caught with its hand in the hardware cookie jar and then writing a blog post about how the jar was left unlocked,” US tech thought leader Brian Roemmele wrote on X. Where happens next? Ultimately, what comes next is up to Apple and OpenAI. The two companies might reach a deal out of court, or be forced into an agreement by the legal system. The existential nature of the rivalry suggests the latter, rather than former. It is also very telling that OpenAI, which now has more than 400 former Apple employees on its teams, including many former designers, also claims: “Apple’s request for a preliminary injunction is both based on false information and completely unnecessary because we do not have, nor want, any of their trade secrets. We’re much more interested in building innovative products and technologies that push the frontier.” While Apple hasn’t yet responded, it will be interesting to see whether whatever hardware OpenAI ships looks and behaves like any released or unreleased Apple products; the latter will now be able to bring details of its own historical project design decisions — and the people who made them — to court. I think this case will play out over time. Perhaps the most interesting question is whether OpenAI has taken what it knows about Apple to create its own internal product design and development LLM models. Would that use be legitimate? It would, after all, not be the first time an AI company has trained its models on other people’s creative energy. You can follow me on social media! Join me on BlueSky,  LinkedIn, Mastodon and subscribe to The Core.