Apple’s Lawsuit Claims OpenAI Hired Over 400 Former Employees, Could Disrupt AI Firm's Plans to Launch Consumer Hardware

Apple's latest legal action against OpenAI appears to disrupt the AI company's plans to bring consumer hardware to rival the iPhone. The Cupertino-based company reportedly filed a lawsuit last week accusing OpenAI of misappropriating its intellectual property. The lawsuit alleges that OpenAI asked former Apple employees to share information about Apple's unreleased products and trade secrets. Apple claims that OpenAI has aggressively recruited talent from Apple's engineering division, and the company now employs more than 400 former Apple workers.

Apple Accuses OpenAI of Misusing Trade Secrets

As per a report by Bloomberg, in the lawsuit, Apple claims that OpenAI asked former Apple employees and even prospective hires to share confidential details about unreleased products. Apple also claims the company advised recruits on how to avoid its internal security procedures.

Apple is seeking financial damages in the complaint, alongside a court order requiring OpenAI to stop the alleged conduct and destroy any proprietary materials. This lawsuit is likely to affect the ChatGPT maker's hiring efforts and its future product development plans. OpenAI reportedly said it has "no interest in other companies' trade secrets" and would "remain focused on building innovative technology.”

In the lawsuit, Apple reportedly claims that OpenAI aggressively hired people from Apple and extensively hired talent from iPhone, Apple Watch, AirPods and other major product departments. The lawsuit alleges that OpenAI now employs more than 400 former Apple workers, with high compensation packages. Based on this, the iPhone maker recently offered large retention bonuses for its employees. Apple says OpenAI hired more people who were involved in iPhone product design.

Apple reportedly said the lawsuit is squarely about trade secrets and characterised OpenAI's hardware work as nascent. “This lawsuit and the discovery process are needed to expose and begin to remedy the pervasive theft of Apple's trade secrets,” the company reportedly said.

The lawsuit could pose a challenge to OpenAI's potential to build an iPhone competitor. The lawsuit and concerns about OpenAI's methods may cause many Apple employees to reconsider leaving for OpenAI.

OpenAI has been working on its hardware division to launch its first AI agent phone to rival the iPhone. The mass production of this device is said to start as early as the first half of next year. Previous leaks claimed that MediaTek is likely to be the exclusive chip supplier for the OpenAI smartphone. It could run on a custom version of the MediaTek Dimensity 9600 chipset, manufactured using TSMC's N2P process technology.