Daijiworld Media Network - San Francisco

San Francisco, Jul 11: Apple Inc. has filed a lawsuit against OpenAI, accusing the artificial intelligence company and its chief hardware officer of orchestrating a coordinated campaign to steal trade secrets related to Apple's upcoming products in a bid to accelerate the development of OpenAI's own hardware devices.

The lawsuit, filed on Friday in the US District Court for the Northern District of California, alleges that OpenAI encouraged Apple employees to share confidential information, components, engineering drawings and other proprietary materials connected to unreleased products.

Apple has also named Tang Tan, OpenAI's chief hardware officer, as a defendant. Tan previously served as Apple's vice president of product design, overseeing the development of the iPhone, Apple Watch, AirPods and several other hardware products before leaving the company.

Responding to the allegations, OpenAI denied any wrongdoing.

"We have no interest in other companies' trade secrets. We remain focused on building innovative technology that empowers people everywhere," an OpenAI spokesperson said in a statement.

The lawsuit marks a dramatic escalation in tensions between the two companies, which have worked closely together in recent years. OpenAI provides the technology behind several Apple Intelligence features, including ChatGPT integration into Siri and other AI-powered functions across Apple devices.

Relations between the companies have reportedly deteriorated over the past year, particularly after OpenAI recruited former Apple design chief Jony Ive to help develop a new generation of AI-powered hardware.

According to the lawsuit, OpenAI has hired more than 400 former Apple employees.

"At every level, from members of its technical staff to its chief hardware officer, and in coordination with business partners, OpenAI has been stealing Apple's trade secrets and confidential information," Apple alleged in the court filing.

"As a natural result, OpenAI's nascent hardware business now rests on the shakiest of foundations, rotten to its core by its illegal reliance on misappropriated trade secrets," the company added.

Apple is seeking a jury trial and has asked the court to order OpenAI to stop using its confidential information, destroy any proprietary materials in its possession and redesign future products so they no longer incorporate Apple's technology.

The lawsuit further alleges that Tang Tan encouraged Apple employees to disclose confidential information during job interviews. Apple also named former iPhone hardware engineer Chang Liu, who joined OpenAI in January, accusing him of downloading confidential company files before leaving.

According to the complaint, Liu "surreptitiously accessed and downloaded dozens of Apple's confidential hardware-related files, including detailed information about unreleased products, engineering presentations, technical specifications and proprietary project data" while working on hardware for OpenAI.

Apple also alleged that OpenAI coached departing employees on how to leave the company without raising suspicion.

"OpenAI has counselled departing employees not to disclose their next employer and given advice on how to avoid the 'dreaded walk out' that would promptly remove them from the company rather than giving them a standard two weeks in which they could continue to access Apple's confidential information and trade secrets," the lawsuit stated.

The legal battle underscores the growing competition among major technology companies to develop next-generation artificial intelligence devices as the industry moves beyond the smartphone era.

Apple is currently developing several AI-focused products, including smart glasses, wearable pendants and camera-equipped AirPods.

Tang Tan left Apple in 2024 to co-found AI devices startup io Products Inc. with former Apple design chief Jony Ive and Apple design veteran Evans Hankey. OpenAI acquired the startup last year for USD 6.5 billion. Neither Ive nor Hankey has been named in the lawsuit.

Apple said it had attempted to resolve the dispute privately months ago by asking OpenAI to cease the alleged practices and eliminate any proprietary materials. According to the company, OpenAI did not respond, prompting Apple to initiate legal proceedings.

"Significant evidence has emerged suggesting individuals employed by OpenAI wrongfully took Apple's secret and confidential information regarding our unreleased technologies, processes and products," Apple said in a statement.

The dispute comes amid a series of high-profile departures from Apple to OpenAI, including the executive leading Apple's smart glasses project, who left the company last month.

Although Apple and OpenAI never collaborated on hardware development, they have partnered extensively on artificial intelligence features. Their collaboration was announced during Apple's Worldwide Developers Conference two years ago, when OpenAI chief executive Sam Altman attended the event. At the time, Apple's software chief Craig Federighi described OpenAI as the "pioneer and market leader" in artificial intelligence.

The partnership enabled iPhone users to access ChatGPT through Siri, generate text, analyse surrounding objects using Visual Intelligence and later create images through Apple's Image Playground app as well as analyse on-screen content.

However, the relationship has reportedly soured. According to Bloomberg News, OpenAI had earlier considered legal action against Apple after becoming dissatisfied with the benefits of the partnership and reportedly discussed issuing a breach of contract notice.