OpenAI’s plans to build a hardware rival to the iPhone may be facing trouble due to Apple’s trade secret lawsuit. According to Bloomberg’s Mark Gurman, the legal battle is already affecting OpenAI’s device ambitions, even before a court has made any decision. For those unaware, Apple sued OpenAI last week and accused the AI company of seeking confidential details about unreleased products from former Apple employees and potential hires. Apple also claims OpenAI guided employees on how to avoid security checks during Apple’s exit interviews. The iPhone maker wants OpenAI to stop the alleged practices and destroy any confidential material it may have received. Apple is also seeking damages. Meanwhile, OpenAI has denied interest in competitors’ confidential information.
According to Gurman, the lawsuit could make it harder for OpenAI to hire experienced Apple engineers. More than 400 former Apple employees already work at OpenAI. The list includes former Apple design chief Jony Ive. OpenAI has also hired several people from Apple’s iPhone product design team. Apple reportedly had to rebuild parts of the team after several employees left.
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Apple is now said to be offering bigger retention bonuses to keep engineers at the company. Senior executives are also reportedly getting involved in efforts to stop key employees from leaving.
The lawsuit is also said to change how OpenAI develops its future hardware products. Former Apple employees may become more careful when discussing their previous work. OpenAI managers may also avoid asking detailed technical questions that may involve Apple’s confidential information.
Suppliers may also become more cautious about working with OpenAI. Apple has strong relationships with consumer electronics manufacturers in Asia. Some suppliers can avoid deeper partnerships with OpenAI to protect their existing business with Apple or stay away from the legal dispute.
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Bloomberg Intelligence wrote, “Apple is likely to secure targeted preliminary relief tied to OpenAI’s device effort.” If Apple proves its trade secrets were used in OpenAI products, the AI company may need to redesign them.
Despite the lawsuit, OpenAI still plans to announce its first hardware product this year and release it in 2027, as per the report. Do note that the timeline could change.