Apple Sues OpenAI for Stealing Trade Secrets, SK Hynix Gets Hammered

**Zaid Admani** (0:00)
Public.com presents The Rundown, your daily market update in 10 minutes. My name is Zaid Admani, and today is Monday, July 13th. In today's episode, we'll break down the weekend flera between the US and Iran, and preview a stacked week of inflation data and bank earnings. We'll also tell you why Apple is suing OpenAI, and the details in this lawsuit are absolutely wild. Then stick around to the end of the show to find out how much the Seattle Seahawks just sold for, and the price tag is shocking. We got a great show for you today.
Let's go.
Stocks are coming off a winning week. The S&P 500 gained 1.2% last week, while the NASDAQ was up 1.7%. Now the Dow Jones did fall a half a percent last week, breaking a four week winning streak, but nobody cares about the Dow, so. Now things are off to a bumpy start this week. US and Iran exchanged another round of strikes over the weekend, raising fears of major escalation. Iran now says the Strait of Hormuz is closed again, while the US insists that it's open and commercial ships are still getting through. The fighting is weighing on the markets this morning. Oil prices are rising with Brent crude up 4% and trading near $80 a barrel, while stocks are red across the board in pre-market trading, with tech stocks leading the decline. So the Iran war will be an interesting backdrop to what is going to be a stacked week coming up. We just listen to all the stuff that we're expecting this week. Tuesday morning, we get the June CPI inflation report, then on Wednesday morning, we're getting the wholesale inflation report. And then right in the middle of all of that, new Fed Chair Kevin Warsh makes his first appearance before Congress on Tuesday and Wednesday, and I'm sure he's gonna get a ton of questions about where interest rates will go. The markets will be paying close attention to that, but that's not all. We're also getting a ton of earnings this week, including from major banks, including JP Morgan, Bank of America and Wells Fargo. And then we're gonna be hearing from TSMC and Netflix later in the week. So this week kicks off earnings season and the bar is pretty high. Wall Street expects earnings to have grown north of 20% last quarter, with some estimates calling for a nearing 30% growth. So we'll have to see if the earnings live up to that expectation. We're gonna be staying on top of all of this. So if you're new here, it's a great time to get subscribed to the podcast and tune in every day to stay in the loop.
Let's run through some headlines. And we're talking about the beef between Apple and OpenAI. Apple filed a lawsuit against OpenAI on Friday, accusing them of stealing trade secrets to help build their own consumer device. And I gotta say the details of this lawsuit are wild. Now you gotta remember Apple and OpenAI were partners and they still kind of are because Apple integrated ChatGPT into Siri back in 2024 But these days, the relationship has been pretty rocky, especially after OpenAI announced plans to build their own consumer device to compete with the iPhone last year. OpenAI even paid $6.5 billion to acquire a company called IO, which was founded by Johnny Ive, who worked for Apple for a long time and was responsible for designing the iPad, the iPhone and the iPod. And for the last year or so, OpenAI has been raiding Apple for talent. More than 400 former Apple employees now work at OpenAI, including Tang Tan, who spent 24 years at Apple, leading the iPhone and Apple watch design, but he's now the chief hardware officer at OpenAI. Now Tang Tan is the main target of the lawsuit because Apple alleges that he asked some Apple employees interviewing for a job at OpenAI to bring unreleased hardware components to interviews for what were basically like show and tell sessions. So in the interview, these Apple employees were bringing things like batteries, logic boards and other components. But this lawsuit gets even crazier. Apple accused one of their former engineers, Chang Liu of exploiting a software bug to access Apple's internal servers after he had already joined OpenAI. So as Liu was working at OpenAI, he had access to Apple's presentations, hardware designs, manufacturing details and testing procedures. And what's wild here is that Liu texted a former colleague, quote, LOL, I found out that I can access the network storage. So funny. And now that text is in a federal lawsuit. Now look, OpenAI is denying everything, saying that they have no interest in other companies' trade secrets. And Sam Altman posted on X that he's not afraid of Apple. But look, the damage may already be done because this lawsuit could slow OpenAI's recruiting. They could spook suppliers and be a setback for their hardware ambitions. OpenAI was planning to ship their first device in 2027 That might not happen anymore. And all of this could also force OpenAI to delay their IPO plans. To me, this tells me two things. For one, Apple feels threatened from OpenAI's hardware ambitions to go through with this lawsuit. And number two, they might actually have a strong case here. Now, I should point out, it is a bit weird that Apple's internal security is so bad that it allowed a former employee to get access to internal file storage and confidential files. But that's a conversation for another day. Let me know in the comments on what you guys think. How do you see this playing out? I really hope that they don't settle because this is gonna lead to some incredible discovery. By the way, I should mention Apple stock has been quietly near record highs. The stock has rallied 16% in the last three weeks and Apple has been the best performing Magnificent 7 stock this year. I think one reason for that is because Apple hasn't spent a fortune on AI capex like some of the hyperscalers, making them almost like a hedge against the AI trade and fears of an AI bubble. Let's talk about some stocks making moves today.