Apple Sues OpenAI, Meta Rolls Back Muse, and AI Cheating

**Brian** (0:00)
Hey, what's going on, everybody? It's Monday, July 13th, 2026, and this is The Daily AI Show Live. It's 10 a.m. on the East Coast, 7 a.m. on the Pacific, and Andy and I are here, I'm Brian, to get you going for the week. Talk about all the things that are happening with AI over the weekend. There's always something going on. The weekend doesn't sleep, or AI doesn't sleep on the weekends, I should say, or take the weekends off. So there's always something going on. The stories are evolving from things that we talked about on Friday, as well as some over arching, longer stories that we typically get into as well. So welcome to everybody in the comments as well. How are you guys?
Might be just Andy and I today. We know Karl is out, and I'm not sure about Beth, but that's okay. Andy and I are ready to get you going. So Andy, I don't want to throw you on the spot, but usually you have a few that you're interested in, so why don't you get us going?

**Andy** (0:51)
Yeah. So on Friday after our show, so we didn't catch it on Friday, Apple sued OpenAI in a big way. So what they're suing OpenAI for is stealing confidential information regarding their unreleased technologies, processes, and products around hardware for AI.
And this centers around two long-time Apple employees who are involved in that development who left and joined OpenAI. So on one surface, it looks like, okay, this is another case of sort of the fluid poaching of high-level talent from one AI company to another, and them taking what they know across and delivering it to the other one. And so it's kind of, in a way, evens out the playing field that might have gotten tilted by substantial R&D investment by one company relative to another. So they're arguing that OpenAI can catch up very quickly by stealing this information. So here's what they say happened.
In the legal filing, which alleges that the two guys, one of them is named Tang Tan, who worked at Apple for 24 years, and is now OpenAI's chief hardware engineer. And then Chang Liu, who worked at Apple for eight years, and joined OpenAI's hardware team in January. Okay, so the suit alleges that those two coached former Apple employees that were still there at Apple to bring physical parts to the interview to join OpenAI. So they invite them to an interview. They say, bring this to the interview.

**Brian** (2:50)
Yeah.

**Andy** (2:51)
And apparently some of those things, you know, one might conclude, ended up in the hands of OpenAI, having been purloined from Apple. And they said also that they encouraged some of the people who are doing these interviews by showing them during the interview how to circumvent Apple's security protocols to steal valuable information from the systems before they left the company to join Apple.
Yeah, to join OpenAI. It got mixed up there.

**Brian** (3:32)
Yeah, it's not just intelligence. We're not just talking about, oh, we're all sharing people, people move the Meta, but this is at a higher order. What you're explaining is perhaps theft and some other things that are a much more obvious smoking gun, it sounds like. Of course, it's all allegedly, right?
There's a lawsuit, but yeah, it's going to keep going, Andy. But yeah, this is more than a little bit.

**Andy** (4:01)
The appealing argument to me is that it should not be possible for one company to avoid having to do the R&D that's necessary to arrive at a certain high-level capability in technology.
This is actually quite parallel to the whole idea of distilling frontier models by just training your model to be able to answer all the questions by using the model that already has the training and has the reasoning to answer those questions. So that's another way of stealing a lot of investment and then avoiding the investment on your part and ending up in a competitive position without having to make that investment. So what Apple's basically saying is that OpenAI shouldn't be able to just hire employees and guide those employees in such a way that it could jumpstart their hardware efforts.

**Brian** (5:02)
Yeah. I'm curious. I'm going to bring Gareth on too because Gareth joined us. So hey, Gareth, but Andy, I wanted to follow up with this just because you have a wealth of experience and knowledge across several different businesses through your career.
How was this handled? Obviously, I get it. We didn't have AI and maybe not these use cases, but stealing R&D and people moving from company to company has always been around.