Completely torn apart! Apple Inc. (AAPL.US) sues OpenAI for stealing trade secrets and demands the destruction of all infringing materials.

Apple Inc. filed a lawsuit against OpenAI recently, accusing the AI startup and its hardware lead of collaborating to systematically steal information about Apple Inc.'s unreleased products. In the complaint filed in the Northern District of California Federal District Court on Friday, Apple Inc. stated that OpenAI induced Apple Inc. employees to share information related to upcoming products, components, design drawings, and other materials, in order to advance its own hardware product development. In this lawsuit, Apple Inc. also named OpenAI's hardware lead, Tang Tan, as a defendant. Tan previously served as the vice president of product design at Apple Inc., responsible for the research and development of several core products in the company's hardware engineering department, including the iPhone, smartwatch, AirPods, and other products. In response to the lawsuit, OpenAI stated in a statement that they are "not interested in other companies' trade secrets." A spokesperson for the company, headquartered in San Francisco, said, "We remain focused on building innovative technology that benefits users globally." This legal dispute marks a sharp downturn in the relationship between the two companies, which have closely collaborated in recent years. As the developer of ChatGPT chatbots, OpenAI has provided crucial technological support to Apple Inc.'s Apple Intelligence platform and the Siri digital assistant. However, tensions between the two companies have escalated over the past year, especially after OpenAI invited Jony Ive, a former key designer at Apple Inc., to participate in device development. Currently, OpenAI is preparing to launch its initial public offering within the next few months, and the company has attracted a large number of employees from Apple Inc. The complaint reveals that over 400 former Apple Inc. employees have joined OpenAI. The tech giant, headquartered in Cupertino, California, stated in the complaint, "From members of the technical team to the head of the hardware business, and in collaboration with business partners, OpenAI continues to systematically steal Apple Inc.'s trade secrets and confidential information on all levels. The direct consequence is that OpenAI's burgeoning hardware business is now built on the shakiest foundation, as it fundamentally rots due to its illegal dependence on stolen trade secrets." Apple Inc. has requested that OpenAI immediately cease its activities and destroy all proprietary materials. Apple Inc. also requests that the court empanel a jury to hear the case and require OpenAI to redesign its upcoming products to ensure they do not contain any Apple Inc. technology. Apple Inc. pointed out that Tan had guided job candidates during recruitment interviews to provide information about unreleased Apple Inc. products. The complaint also names a former iPhone hardware engineer, Chang Liu, who is said to have provided related materials. Liu joined OpenAI in January of this year. The complaint reveals, "Within a matter of weeks, Liu secretly accessed and downloaded dozens of confidential hardware files from Apple Inc., including extensive details on unreleased products, engineering presentations, technical specifications, and proprietary project data, while developing hardware for OpenAI." Apple Inc. stated that its employees had received "specific guidance" from OpenAI regarding the resignation process. The complaint states, "OpenAI advised soon-to-be departing employees not to disclose information to their next employer and provided advice on how to avoid 'immediate termination,' which would result in them being swiftly removed from the company, preventing them from enjoying the usual two-week transition period during which they could continue to access Apple Inc.'s confidential information and trade secrets." This case highlights the strategic importance of the next generation of AI devices in Silicon Valley. Companies such as Apple Inc., OpenAI, and Meta Platforms Inc. (META.US) are racing to develop new devices centered around artificial intelligence to position themselves for the post-smartphone era. Apple Inc. is developing various forms of products such as smart glasses, pendant devices, and AirPods equipped with cameras to fully adapt to the AI era. Tan left Apple Inc. in 2024 and co-founded the AI device startup io Products Inc. with Ive and Apple Inc.'s senior design executive Evans Hankey. OpenAI acquired this startup for $6.5 billion last year. Ive and Hankey are not named as defendants in the lawsuit. Apple Inc. stated that it had attempted to resolve the dispute with OpenAI out of court months ago, requesting that it cease its activities and clear all proprietary materials. Apple Inc. stated that it did not receive a response and therefore decided to file the lawsuit. In a statement, Apple Inc. said, "There is substantial evidence that the individuals employed by OpenAI inappropriately obtained Apple Inc.'s trade secrets and confidential information regarding unreleased technologies, processes, and products." As part of the talent flow to OpenAI, the project lead for Apple Inc.'s smart glasses left last month. While the two companies have never collaborated on hardware development, they have previously worked together on AI features for the iPhone and other products. This collaboration was announced at Apple Inc.'s global developer conference two years ago, with OpenAI CEO Sam Altman present in the audience. At the event, Apple Inc.'s software head Craig Federighi referred to the startup as a "pioneer and market leader" in the AI field, suggesting a broad strategic partnership between the two. This collaboration allowed users to access ChatGPT through Siri and utilize AI technology to generate text and analyze surrounding objects through iPhone's visual intelligence features. The partnership expanded further, with Apple Inc. integrating ChatGPT into the Image Playground app for image creation and analysis of on-screen content. However, there have been cracks in the collaboration surrounding ChatGPT in Siri. Earlier this year, reports indicated that OpenAI was considering legal action against Apple Inc. Insiders revealed that the AI startup did not receive the expected benefits from the partnership and had considered sending a notice of breach. (Apologies for any unintentional omissions or inaccuracies in the translation.) Let me know if you need any more assistance.