Apple Inc. (AAPL.US) sues OpenAI for theft of trade secrets, Ultraman boldly declares "not afraid"! But a lawsuit could make its hardware dreams come to a halt.

According to industry analysts, Apple Inc. recently filed a lawsuit against OpenAI, accusing them of systematically stealing Apple Inc.'s intellectual property. This legal action may have a substantial impact on OpenAI's hardware ambitions before the case is settled. In the complaint filed last week, the iPhone manufacturer claims that OpenAI not only recruited former Apple Inc. employees, but also potential applicants, to join the company with unreleased product information. Apple Inc. also alleges that OpenAI instructed new hires on how to circumvent Apple Inc.'s security processes, with the workaround instructions coming from a former iPhone design lead at Apple Inc. Apple Inc. is seeking financial compensation and requesting a court order for OpenAI to cease their actions and destroy all proprietary materials. While it may take months or even years for a legal ruling to be made, the ripple effects of the lawsuit could be immediate - potentially affecting OpenAI's talent recruitment and product development processes. OpenAI has declined to comment on their hardware plans. However, in response to last Friday's lawsuit, the company stated that they have "no interest in other companies' trade secrets" and will "continue to focus on innovative technology development." Talent loss as the catalyst, OpenAI has become Apple Inc.'s top poacher in hardware For Apple Inc., the battle with OpenAI is crucial. The San Francisco-based artificial intelligence (AI) company has been aggressively poaching talent from Apple Inc.'s hardware department in recent years, leading to significant talent loss in teams responsible for core products like the iPhone, Apple Watch, and AirPods. In some cases, OpenAI's aggressive recruiting efforts - especially within Apple Inc.'s iPhone product design team - have forced Apple Inc. to reconstruct certain teams. According to statistics, OpenAI currently employs over 400 former Apple Inc. employees. To attract these talents, OpenAI offers highly competitive compensation packages, prompting Apple Inc. to recently issue unusually high retention bonuses in response. Apple Inc. even deployed multiple executives to personally persuade senior engineers to stay. In recent months, the loss of trade secrets has become one of Apple Inc.'s biggest concerns internally, with its urgency rivaling that of tariff threats and the industry's rare shortage of storage chips. By absorbing hundreds of former Apple Inc. engineers, along with legendary designer Jony Ive and others joining, and leveraging leading AI technology, OpenAI has the potential to become Apple Inc.'s most formidable hardware opponent in years. This comes as Apple Inc. itself is playing catch-up in the AI field and undergoing significant restructuring in its hardware organizational structure. Even Apple Inc. executives acknowledge the disruptive potential of AI. In testimony at last year's trial against Alphabet Inc. Class C (GOOGL.US) for alleged search engine monopoly, Apple Inc. services chief Eddy Cue warned that AI technology could reshape the device market landscape. "In ten years, you might not need an iPhone anymore - even though that sounds crazy," he said. Lawsuit causing harm before trial, casting a shadow over OpenAI's recruitment and research Apple Inc. emphasizes in the legal documents that the core of this case revolves around trade secrets, stating that OpenAI's hardware work is still in the early stages. "This lawsuit and subsequent evidence investigation aim to expose and begin correcting the systematic misuse of Apple Inc.'s trade secrets," Apple Inc. said. However, even the lawsuit itself has already harmed OpenAI's potential to create a true competitor to the iPhone. The allegations, coupled with potential investigations and external doubts about their methods, are enough to make many Apple Inc. employees reconsider their plans to join OpenAI. Even just interviewing with OpenAI could subject Apple Inc. employees to scrutiny from the company's security team and management. This alone could slow down OpenAI's recruitment process, keeping more engineers at Apple Inc. and reducing the flow of internal knowledge to OpenAI - even before a court ruling, this effect is already apparent. Beyond the recruitment aspect, the lawsuit may also reshape OpenAI's engineering culture. Former Apple Inc. employees may be hesitant to discuss their past work, and management may avoid certain technical questions for fear of touching on Apple Inc.'s confidential information. The result could be an increasingly cautious organizational atmosphere. The lawsuit is likely to add more internal process steps for OpenAI, including new legal reviews, stricter internal controls, and compliance training - all of which will consume engineers' time that should be devoted to development. OpenAI's executive leadership will also have to expend considerable effort cooperating with lawyers, participating in evidence disclosure, and undergoing questioning. These factors could all slow down product development. Looking ahead, if Apple Inc. ultimately proves that OpenAI incorporated their trade secrets into upcoming devices, the AI startup may be forced to redesign its products. This would be reminiscent of Apple Inc.'s settlement with chip startup Rivos, which agreed to reset some of its processor technology. First product may launch as planned, but long-term expansion faces uncertainties According to sources familiar with the matter, despite Apple Inc. filing the lawsuit, OpenAI internally still believes that their first product can be released as planned this year, with an official launch in 2027. However, the source also mentioned that as details of the Apple Inc. lawsuit gradually surface, this timeline may still be subject to changes. Given that the information is not public yet, the source requested anonymity. Nevertheless, even as the development of the first product reaches the late stages, the rapid construction of OpenAI's envisioned "device family" is now facing greater challenges. Reportedly, OpenAI has explored multiple categories including smart speakers and wearable devices, but their ultimate goal is to launch a product that rivals the iPhone. Before that, a device simpler than a smartphone may be the first to debut. At the same time, Apple Inc. is advancing AI-driven wearable devices, including new AirPods, a pendant device, and smart glasses; as well as developing a range of home products, such as the desktop Siasun Robot & Automation, a smart home control center with facial recognition, and security systems. Analysts suggest, "Apple Inc. is likely to obtain targeted preliminary relief in the OpenAI hardware project. The ruling may require OpenAI to segregate disputed materials, preserve evidence, and provide compliance proof, potentially slowing down their hardware development timeline." Supply chain could be a hidden obstacle, OpenAI's ability to break through remains uncertain Another key factor is the supply chain. While Asia boasts the world's largest electronic manufacturing industry, the circle of core suppliers deeply immersed in consumer electronics is not large. Given Apple Inc.'s market dominance, suppliers may have reservations about deepening cooperation with OpenAI, fearing that it may impact their relationships with Apple Inc., a larger and more mature partner, and potentially lead to legal disputes. Admittedly, OpenAI has a top-tier engineering team in Silicon Valley, legal resources to address Apple Inc.'s accusations, and the support of former Apple Inc. executives like Ive and Tang Tan - their long-term relationships with suppliers, investors, and other key partners may help the company mitigate the impact and ensure their hardware plans stay on track. Regardless of whether Apple Inc. can prove its allegations in court, this lawsuit has created a perception that is difficult for OpenAI to shake off. OpenAI CEO Sam Altman posted on X platform last Saturday, stating that he is "not afraid of Apple Inc." and has "great respect" for the company. However, Apple Inc.'s attitude as stated in the complaint is starkly different. Apple Inc. wrote, "OpenAI's hardware business is now built on the most fragile foundation, its core rotting from the illegal reliance on stolen trade secrets." Before the case goes to a judge or jury, Apple Inc. may have already achieved an accomplishment comparable to winning in court - slowing down the competitor that is most eager to usher in the "post-iPhone era."