Apple Declares War On OpenAI

**Ian Krietzberg** (0:01)
That is the allegation. And further, I mean, if that surprised you, wait for this one. In interviews, the Apple employees who were interviewing for jobs were asked to bring prototypes of hardware to the interviews.

**Peter Hamby** (0:20)
Welcome to The Powers That Be Daily, Puck's podcast focused on the intersection of Wall Street, Washington, Silicon Valley, and Hollywood and the players who run it all. I'm Peter Hamby. It's Wednesday, July 15th. Today, I'm joined by Ian Krietzberg, who breaks down Apple's shocking lawsuit against OpenAI, which accuses Sam Altman's company of waging a huge corporate espionage campaign to steal trade secrets from Cupertino. We also get Ian's take on the politics of AI this midterm season, and why fears about AI and data centers aren't totally registering with voters, at least not yet. We'll discuss all that and much more on today's episode of The Powers That Be.
Happy Wednesday everybody, and welcome to The Powers That Be. I'm joined today by my colleague Ian Krietzberg, author of The Hidden Lair, a resident expert on all things AI. We're going to discuss Apple filing a huge lawsuit against OpenAI, alleging trade secret theft from a bunch of former Apple employees who moved to OpenAI and are accused of waging a huge corporate espionage campaign. This is a wild lawsuit. Ian's gonna break it down. We're also going to talk about his new piece detailing how voters are thinking about AI, what's popular, what's not, this whole data center debate that's playing out in the midterms right now. But first, Ian, we got to start with this Apple lawsuit. Just for people who don't know what it is, explain what happened.

**Ian Krietzberg** (2:08)
Sure. So Apple files this lawsuit. And the interesting kind of backstory context to this is that in 2024 at WWDC, Apple had a partnership that they announced with OpenAI, and they were very happy about it.
At the time, ChatGPT was going to be a maybe optional thing that you could use within Siri. And there was this whole kind of ongoing race to see if Apple can't crack its AI stuff, who is it going to partner with? And the front runner was seemingly OpenAI. And so that's been quietly going on. And of course, in the past few months, it did not go to OpenAI. Apple's been working with Google. The new Siri will be built around Gemini. And people were kind of thinking, OK, that's interesting. I thought they were kind of partnered up. And so this lawsuit maybe serves as a bit of an explanation for how their relationship has evolved since 2024 And it just details a widespread effort, according to Apple, who had been conducting an investigation into this, of trade secret theft. And so it's not, you know, anyone who's following OpenAI knows that they're very interested in the hardware space.
Johnny Ive, who used to be a lead designer at Apple, started a company that was focused on AI hardware stuff that OpenAI acquired a year ago for $6.5 billion.
And they've got a lot of former Apple employees working with them to try and figure out what this AI hardware device looks like. We have yet to have any sort of answers from them. But what this lawsuit details is, A, it's the basic stuff, right? Download confidential files, email themselves files as they were leaving. And then you got into some weird kind of wild accusations and allegations here that OpenAI was coaching them on ways to avoid and evade Apple's security procedures so they could continue accessing confidential information after they had already accepted employment at OpenAI.

**Peter Hamby** (4:04)
Wait, I just want to interrupt really quick. Sorry, Ian. That's fascinating right there. So basically, Apple employees were leaving to take jobs at OpenAI. They would get the offer.
And then Apple alleges that in that window, OpenAI would coach these new incoming employees to basically take trade secrets with them, or how to evade security protocols on the way out. Is that what it says?

**Ian Krietzberg** (4:29)
That is the allegation.

**Peter Hamby** (4:31)
Wow.

**Ian Krietzberg** (4:32)
And further, I mean, if that surprised you, wait for this one. OK.
In interviews, the Apple employees who were interviewing for jobs were asked to bring prototypes of hardware to the interviews. And some of them were like, I don't know if I can do this, but people did according to the lawsuit. And the general kind of breakdown of this is that they sued a couple of specific people, but also they sued OpenAI and they alleged this is a widespread effort across 400 Apple employees, they say, who left Apple to work with OpenAI to just pilfer Apple's trade secrets. OpenAI, of course, has denied this in a statement. They said, we're not interested in stealing anyone's trade secrets. We just want to build great technology for people. But the phrasing Apple used was, we were left with no other choice, essentially. And so they indicated that a few months ago, they reached out to OpenAI and they said, hey, this thing is happening. Can you do something to make it stop happening? And by the fact that this lawsuit was filed, it would seem like the answer was no, they didn't really do anything to stop it. And so here we are for another blockbuster AI lawsuit. Now that the Elon Sam one is dead, this one will be interesting.