Apple’s Lawsuit Will Disrupt OpenAI’s Bid to Rival the iPhone

**Carol Massar** (0:02)
Bloomberg Audio Studios, podcasts, radio, news.

**Tim Stenovec** (0:08)
You're listening to Bloomberg Businessweek with Carol Massar and Tim Stenovec on Bloomberg Radio.

**Carol Massar** (0:14)
Do you know who might be having a stiff drink right now?

**Tim Stenovec** (0:17)
No, he's working.

**Carol Massar** (0:18)
Maybe people at Apple.

**Tim Stenovec** (0:18)
He's working, he walks in.

**Carol Massar** (0:20)
No, no, I was going to say either people at Apple or people at OpenAI.

**Tim Stenovec** (0:22)
Okay, that's a good point. Mark Gurman walks in here, and you got to say he walks the walk because he's got his AirPods with him. He's got, which version of the iPhone is that, Mark?

**Mark Gurman** (0:32)
This? 17 Pro Max.

**Tim Stenovec** (0:34)
17 Pro Max. Then what is this? Whatever tablet computer situation you have over here?

**Mark Gurman** (0:37)
Samsung tablet. No, I'm just joking.

**Tim Stenovec** (0:39)
Oh, okay. It's an iPad. Okay. Just making sure the cover is on it, so I'm not completely sure.
I love that. Mark, we want to talk to you about this OpenAI lawsuit.

**Mark Gurman** (0:49)
Yeah, it's a stiff drink. Probably Sam Ullman right now, right?

**Carol Massar** (0:51)
Yeah.

**Tim Stenovec** (0:52)
Maybe. I was out last week as Carol keeps reminding me, so I missed the breaking news a little bit.

**Carol Massar** (0:57)
Because I missed you.

**Tim Stenovec** (0:59)
You had a nice follow up about how this could delay.
Whatever hardware product OpenAI is working on. For people who missed, what happened on Friday? Bring us up to speed. Okay.

**Mark Gurman** (1:11)
So Apple sued OpenAI over trade secret theft, claiming that OpenAI has systematically taken their trade secrets, their IP, information about upcoming products, components, development processes, even security procedures about how to leave a company in order to evade Apple security when you depart in order to build their new family of devices.

**Tim Stenovec** (1:37)
Okay. I want to pause it here.

**Carol Massar** (1:38)
Go.

**Tim Stenovec** (1:39)
When you are a company like OpenAI that has, and has historically, or I might say historically, I use that term loosely, but over the past few years, had lots of money and equity to throw at people to attract them to Apple, or from Apple to your company, or wherever they're coming from.
What are the policies in place to stop somebody's brain from sharing that information? Maybe you're not actually on purpose taking-

**Carol Massar** (2:02)
That's what my husband said over the weekend. It's like, if you get hired, you're just going to work for this new company too.

**Tim Stenovec** (2:08)
You're going to know things that the company is working on.

**Mark Gurman** (2:09)
People move between companies in Silicon Valley all the time, and so Apple has to have a high bar here and explain, what is the difference between taking your years of experience and knowledge from one company to another, and what they're claiming is going on here. What they're claiming is that even in the interview process, the people at OpenAI are asking the Apple employees to hold show and tell sessions where they're bringing components, schematics, drawings and whatnot about what they're working on at Apple so they can get more knowledge of it. So they're trying to paint a picture that this is not normal moving between companies.

**Carol Massar** (2:46)
Hold on.

**Tim Stenovec** (2:46)
Hold on. These Apple employees, these are like the most secret. Apple is such a secret.
I'm talking to Mark Gurman about this. I mean, you know this better than anyone else, Mark. I mean, you can't. People on their LinkedIn's barely show what they do when they work at Apple. Like, why are they walking in somewhere talking about what they really want a job?

**Mark Gurman** (3:02)
Well, first of all, OpenAI is paying a ton more than Apple's paying.
For a lot of Apple employees who are like, so I really want to work on the same iPhone year after year, year after year, year after year. Right. It's the same stuff every year. Come to OpenAI, work on something revolutionary, work on the next iPhone, right? Work on the next iPad. So people who are in Silicon Valley, they want the money and they want to work on this revolutionary new thing. So there's a lot of interest. They've hired over 400 people from Apple.

**Carol Massar** (3:29)
That's a lot.

**Mark Gurman** (3:30)
I would venture to guess between 5 and 10 percent of OpenAI.
Their last company they worked at was Apple. So that's a lot of people. So clearly, we're getting them to come for something.

**Carol Massar** (3:39)
Help me understand, the show and tell is before they've left Apple or no, this is after they've left Apple?