OpenAI’s iPhone rival is already facing troubles amid legal battle with Apple

OpenAI is reported to be working on a consumer electronic product that was anticipated to rival Apple’s iPhone. However, the plans took an early hit as the iPhone maker has filed a trade secret lawsuit against OpenAI over alleged violations.

According to a Bloomberg report, the lawsuit has already started to have a major impact on OpenAI’s plans to develop a hardware product. It suggests that it is harder for OpenAI to hire talent as the project is now under legal scrutiny, and this may also slow down the development, considering the legal battle could last for years.

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In addition, many Asian electronics manufacturers and suppliers may be reluctant to partner with OpenAI, especially those who already have a strong relationship with Apple, or they would avoid being involved in the legal dispute.

However, OpenAI denies the claims of stealing Apple’s trade secret and said that it is focused on developing its own technology.

Why did Apple sue OpenAI?

As per the 40-page lawsuit filed by Apple, its employee who currently works at OpenAI shared confidential information about its unreleased Apple products. Reportedly, the employee had access to Apple’s highly confidential product roadmap, industrial design plans, engineering specifications and other proprietary information during their tenure at the company.

Furthermore, Apple also accused OpenAI of encouraging job applicants from Apple to bring confidential information during the hiring process. It also alleges that it advised new hires on how to avoid Apple's security measures during exit interviews.

Must read: Apple sues OpenAI over alleged trade secret theft: What happened and why it matters

It is highlighted that more than 400 Apple employees have joined OpenAI, including former Apple design chief Jony Ive. The report also suggested that Apple has to rebuild parts of that team after losing key talent.

Over the months, Apple is said to be quite concerned about alleged theft of trade secrets, claiming it is one of the biggest internal issues, alongside tariffs and the global memory chip shortage.

Now, former Apple employees working at OpenAI would be more cautious after the lawsuit, and Apple employees considering a move to OpenAI may think twice because of the legal scrutiny.