Episode summary
Apple’s Lawsuit Will Disrupt OpenAI’s Bid to Rival the iPhone | Bloomberg Businessweek
Bloomberg Businessweek Daily
· · Hosts: Carol Massar, Tim Stenovec · Guests: Mark Gurman
Summary
Apple’s lawsuit against OpenAI centers on alleged trade secret theft tied to hiring former Apple employees and gaining access to unreleased product information, components, development processes, and security procedures. Mark Gurman said Apple is trying to show this was more than normal Silicon Valley job-hopping, arguing that OpenAI employees were allegedly asking candidates to bring schematics, drawings, and other confidential material during the interview process.
Gurman said the case may be as much about strategy as damages. Even if it never reaches a verdict, the complaint could chill future recruiting from Apple and force OpenAI to become more cautious, adding red tape and slowing product development. He called the lawsuit thin but said Apple may have filed it after finding a “smoking gun” tied to a former iPhone engineer who allegedly broke into Apple systems after joining OpenAI.
The discussion also focused on OpenAI’s hardware ambitions. Gurman said the company is working on a family of devices, including wearables, earbuds, glasses, a pendant, and a smart speaker, with a phone as the long-term goal. He argued Apple has reasons to worry because OpenAI is combining top Apple hardware talent with AI capabilities, even if it is not yet ready to replace the iPhone.
Key takeaways
- Mark Gurman said Apple’s complaint alleges OpenAI sought unreleased product details, schematics, and security procedures from Apple hires.
- Gurman said the lawsuit is designed to slow recruiting and put OpenAI’s leadership into discovery and depositions for the next year.
- OpenAI is reportedly working on a family of devices, but Gurman said the phone is not likely the first product.
- Gurman said Apple’s biggest fear is the combination of Apple design talent and OpenAI’s AI platform, not just ordinary employee turnover.
Notable quotes
“Apple sued Open AI over trade secret theft, claiming that Open AI has systematically uh taken their trade secrets, their IP”
“they're bringing components, schematics, drawings, and whatnot but what they're working on at Apple so they can get more knowledge of it”
“the damage is done. If you're an Apple employee and you know the scrutiny that anyone at Apple is under right now”
“They're a little busy, right”
“Their ultimate goal is to build a smartphone. I do not believe that the first product that I still am told is being announced this year and launching next year”
How the episode opens
Bloomberg Audio Studios. Podcasts, radio, news. — You're listening to Bloomberg Business Week with Carol Massar and Tim Stenovec on Bloomberg Radio. — Do you know who might be having a stiff drink right now? — No, he's working. — Maybe people at Apple.
He walks in. — No, no. I was going to say either people at Apple or people at Open AI. — Oh, okay. That's a good point. Uh Mark Gurman walks in here and you got to say he he walks the walk because he's got um his AirPods with him. He's got Which version of the iPhone is that, Mark?
This? 17 Pro Max. — 17 Pro Max. And what is this, whatever tablet computer situation you have over here? — Tablet. No, I'm just joking. — IPad. — Okay, it's an iPad. Okay. Just making sure. The cover's on it, so I'm I'm I'm not completely sure. I love that.
I know. — Um Mark, we want to talk to you about this Open AI lawsuit. I was actually — Probably Sam Altman right now, right? — Yeah, yeah, yeah. — Maybe. I mean, I was I was out last week, as Carol keeps reminding me, so I kind of missed the breaking news a little bit.
Cuz I missed you. Okay. — You got a nice a nice follow-up about how this could delay whatever hardware product Open AI is working on. Just If for people who missed what happened on Friday, bring us up to speed.
Okay, so Apple sued Open AI over trade secret theft, claiming that Open AI has systematically uh taken their trade secrets, their IP, uh information about upcoming products, components, development processes, even security procedures about how to leave a company uh in order to evade Apple security when you depart in order to build their new family of devices.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- apple lawsuit
- openai ip theft
- ai device ambitions
- product redesign risk
- recruiting pipeline slowdown
Companies and tickers mentioned
- AAPL
- Apple
- OpenAI
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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