Apple’s War On OpenAI Just Got Personal

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**Ed Elson** (1:46)
Welcome to Prof G Markets. I'm Ed Elson. It is August 5th. Let's check in on yesterday's market vitals.
The major indices climbed with the Dow and the S&P 500 hitting record highs on hopes that Strait of Hormuz would soon reopen. Brent crude oil dropped below $80 per barrel. The yield on 10-year Treasury's decline. AMD shares dropped more than 8% despite posting record revenues. And finally, Palantir shares popped almost 30% a day after crushing earnings and raising its outlook.
Okay, what else is happening? The legal war between OpenAI and Apple just heated up. Last month, Apple sued OpenAI, accusing the company of stealing trade secrets to build its own AI hardware device. At the time, Apple called the lawsuit, quote, just the tip of the iceberg. Then on Monday, Apple asked a federal judge to borrow OpenAI and two ex-employees from accessing, using or disclosing information it claims are trade secrets. Apple also asked the court to fast track the case, arguing that there is a, quote, imminent threat to its trade secrets. OpenAI then fired back in a blog post, calling the lawsuit, quote, careless, aggressive, and oddly personal. The company also accused Apple's lawyers of mistakenly emailing the wrong person after confusing two people with similar Asian surnames. OpenAI maintains it has no interest in using another company's trade secrets and says the suit is, quote, based on information. The hearing has been scheduled for October 1st. Here to unpack this drama, we are speaking with Alex Heath, author of the sources newsletter. Alex, it's good to see you. Let's just start with Apple's preliminary injunction, which was filed at the beginning of the week. Then we'll get to OpenAI's clapback, which was equal parts hilarious and important.
What is Apple saying here? What are they accusing OpenAI of now?

**Alex Heath** (3:58)
Well, they're basically suggesting that there's more to the story than they've led on previously, that the corruption as they see it runs deeper.
And I think most importantly, as you said in the intro, they're wanting a preliminary injunction. I mean, let's be real, Apple's trying to slow OpenAI down. That's what they're trying to do. They're trying to keep this launch that they have for their first device later this year from happening, derail the whole thing, freeze employees from continuing to work on things. And that's why I think we saw that OpenAI response that you talked about.

**Ed Elson** (4:31)
So what do you make of that response? They started with that point about Apple's lawyers emailing the wrong person, and they specifically mentioned that they confused the names of two Asian people, which is, I mean, that seems intentional.

**Alex Heath** (4:48)
It's embarrassing. That's also something you put into a case like this to get people like us to talk about it rather than the merits of the evidence. It's a bit of a distraction. It's like a look over here thing. They're accidentally emailing people. You'll also notice, I'm no lawyer, but you'll notice like the very specific language OpenAI has used. We have no interest in using trade secrets.
Saying to my wife like after I snuck a cookie, that I have no interest in eating cookies doesn't negate the fact that I maybe ate the cookie.
These are very different statements. You could say, we have not done this and we're ready to fight this in court. They're not saying this. They're saying we have no interest in this.