OpenAI fiercely responded to Apple Inc. (AAPL.US) regarding the "theft of trade secrets" accusation, stating that the lawsuit aims to prevent talent mobility and is being used to cover up its own failures in AI.

A pivotal turn has occurred on Monday in the legal battle between ChatGPT developer OpenAI and iPhone manufacturer Apple Inc., centered around a business secret dispute that has shaken Silicon Valley. OpenAI formally submitted documents to the U.S. District Court in San Jose, California, on Monday (August 31), vehemently denying Apple Inc.'s (AAPL.US) allegations of trade secret theft, labeling the dispute as a mess of Apple Inc.s own making and accusing the company of attempting to impede the development of potential competitors and restrict the free movement of employees. Former allies turn adversaries: From "AI marriage" to "court confrontation" This legal war, ignited by the mass departure of over 400 former Apple Inc. employees to OpenAI, not only marks a complete fallout between former AI allies but also pushes California's ban on non-compete agreements against the harsh realities of an AI hardware arms race into extreme conflict. Just two years ago, Apple Inc. and OpenAI were considered enviable AI partners they established a collaboration aimed at expanding the influence of ChatGPT through Siri and helping Apple Inc. solidify its footing in the field of artificial intelligence. However, as competition in the AI industry intensified, this relationship quickly deteriorated. The trigger was OpenAIs ambition in consumer hardware. Analysts believe that should OpenAI succeed in developing a mobile phone or other devices, it would directly divert user attention away from the iPhone. To swiftly address its hardware shortcomings, OpenAI not only spent about $6.5 billion to acquire hardware company io Products but also engaged in targeted poaching of Apple Inc.s hardware engineering team. Apple Inc.s solid evidence and accusations: Systematic theft of secrets On July 10 of this year, Apple Inc. filed a lengthy 41-page complaint in the Northern District of California federal court, officially suing OpenAI, its Chief Hardware Officer Tang Tan, former Apple Inc. systems electrical engineer Chang Liu, and the hardware subsidiary io Products. In the complaint, Apple Inc. laid out several specific accusations: Insider after departure: Apple Inc. accused Liu of failing to return company equipment as required upon departure and exploiting vulnerabilities in Apple Inc.s internal system, where he still had access to the companys cloud storage for several weeks post-departure, downloading dozens of high-level engineering documents, including thousands of pages of main logic board manufacturing test processes. Interviews as intelligence stations: Apple Inc. accused Tan of requiring employees being interviewed from Apple Inc. to present internal hardware components, such as batteries and main logic boards related to development, for internal demonstrations at OpenAI, rather than simply using commercially available parts. Dual talent and technology drain: Apple Inc. pointed out that, at the time of the lawsuit, over 400 former Apple Inc. employees had joined OpenAI, covering multiple core positions in hardware design, supply chain management, and more. As September rolled in, the conflict escalated further. In the latest evidence submitted by Apple Inc. on Monday (August 31), it was revealed that Liu retained the company-issued MacBook two months after his departure, and in March of this year, downloaded Apple Inc.s confidential circuit schematics for use in training OpenAIs artificial intelligence agents. Apple Inc. believes that inputting business secrets into AI models for learning will lead to irreversible and continually spreading confidentiality breaches. OpenAIs fierce counterattack: Apple Inc.s management loopholes and Californias freedom of talent In the face of Apple Inc.s mounting pressure, OpenAI launched a comprehensive counterattack, targeting the vulnerabilities in Apple Inc.s internal management and the core of Californias laws. First, OpenAI declared that it had no interest in Apple Inc.'s outdated technology. In the motion to dismiss submitted, OpenAI stated: OpenAI has no use, need, or desire for Apple Inc.s trade secrets. OpenAI is developing an entirely new product that is fundamentally different from Apple Inc.s existing offerings. Second, OpenAI blamed Apple Inc. for its poor confidentiality measures. OpenAI pointed out that Apple Inc. has long encouraged employees to use personal iCloud accounts to access work documents, making it difficult for departing employees to distinguish between personal and company information. Additionally, Apple Inc.s policy of immediately walking employees out upon their departure does not give them adequate time to return equipment or hand over work. OpenAI sharply mocked, Employees can leave a company like Apple Inc., which struggles in AI applications, to join a vibrant and innovative startup. Apple Inc. cannot blame its own hasty processes for its own mess. Third, OpenAI invoked California law as a shield. OpenAI emphasized that California laws and policies not only allow employees to move freely between competitors but also encourage such movement. OpenAI accused Apple Inc. of filing the lawsuit with the real aim of compensating for its shortcomings in the talent market and its failures in AI integration. A "holy war" determining the future landscape of AI hardware In this lawsuit, Apple Inc. is attempting to block California laws against non-compete agreements using trade secret laws. Meanwhile, OpenAI seeks to demonstrate that Apple Inc.'s secrets are merely outdated hardware knowledge, and its true moat lies in AI software. This is a "holy war" over the sovereignty of AI hardware. Apple Inc. is trying to protect its decades of accumulated bible of hardware design, while OpenAI aims to prove that in an era where AI defines hardware, the physical laws of the old era have become obsolete. The ultimate direction of the case will depend not only on the evidence presented in court but also on the profound game concerning Silicon Valleys future definitions of "talent, technology, and innovation."