What Apple's OpenAI lawsuit is really about | Decoder

Culturally, this just feels like part of the AI industry to me that they think they can just take everything to build super intelligence as fast as they can, and once they get there, all will be forgiven. It feels like this lawsuit is going to be a proxy for that as much as anything else.

It's pretty crazy reading the wildest claims from the lawsuit. And you know, also the messages that were being exchanged, like one of them allegedly accessing, you know, Apple confidential information on a device and then saying, "LOL, it's so funny that I can access this." So, yeah, there's a lot there.

900 million free ChatGPT users is not a reflection of anything other than, "Well, Google search got really bad and this thing will tell you it loves you." It hasn't turned into we culturally love the products of AI. It's turned into get this slop out of my face and we're going to boo you at graduation and we're going to come to the town board meetings and say we don't want data centers. And there's some huge gap there. Do you think OpenAI can close that gap?

Hello and welcome to Decoder. I'm Nilay Patel, editor in chief of The Verge, and Decoder is my show about big ideas and other problems. Today I'm talking with Hayden Field, The Verge's senior AI reporter, about the major trade secret lawsuit between Apple and OpenAI and what this tells us about OpenAI's future. By now, I'm sure most Decoder listeners are familiar with Apple's allegations in this case. The company says a number of ex-Apple employees at OpenAI targeted Apple's trade secrets in job interviews and even downloaded files from Apple's servers related to hardware manufacturing. The claims are shocking, although OpenAI denies them, and we have yet to see that company's legal response. Hayden has been covering OpenAI for years now, and she talked to a number of lawyers who specialize in intellectual property and trade secret law to get a sense of how serious this case is. And the answer is not entirely positive for OpenAI, which spent more than $6.5 billion to acquire legendary Apple designer Jony Ive's AI hardware startup, IO Products, back in 2025. Apple is a notoriously tenacious litigant, and we have lots of tech industry history to back that reputation up. But those cases were against companies at the scale of Microsoft and Samsung, giant corporations that could afford the cost and distraction of this kind of litigation. OpenAI isn't yet that kind of company. It's still burning cash, a little strategically adrift as it tries to compete in both consumer and enterprise markets, and it's turning over executives on a regular basis. So Hayden and I spent a lot of time talking about what this case might mean for a company that defined the early part of the AI boom, but which lately always seems to be in a crisis of one sort or another. Okay. Verge senior AI reporter Hayden Field on the Apple-OpenAI lawsuit and how the AI industry might change because of it. Here we go. Hayden Field, you're a senior AI reporter for The Verge. Welcome back to Decoder. Thanks. Great to be here.

Once again, we're going to talk about OpenAI. Hayden, once again, it never stops. And we're going to talk about whether OpenAI can maintain focus at a time of great distraction, which seems to be just a theme with that company. Although this time it's not their own distraction. It's a distraction from out in the world, maybe caused by some of their own behavior. I'm of course talking about the Apple trade secret lawsuit. It feels like a big deal. Apple is accusing OpenAI of stealing all kinds of information from that company, even in job interviews, asking people in job interviews to tell them what they know about Apple products. Tell us briefly about this lawsuit and what's going on here.

I wrote a piece last week called "Sam Altman Didn't Need Another Lawsuit," and that's really the situation here. I mean, it seems pretty egregious from some of the claims that Apple is making. Apparently, you know, a former Apple employee was soliciting trade secrets allegedly over interviews, asking people to maybe bring pieces of hardware outside the office, outside the Apple office, to OpenAI to do a show-and-tell in interviews, things like that. There's a lot of allegations being made that are pretty crazy, I thought. But then when I actually interviewed a bunch of experts last week, they said they've seen all of this before a lot. It's just they haven't seen all of it in one case with two key players. So, you know, some of this stuff is pretty egregious, it seems, if it comes out to be true. But also, you know, to the experts in the space, they're like, "Oh, we see this all the time with trade secrets cases. It's not crazy." What's really crazy is that it's all in one case and that it's two really large companies.

You know, it's really interesting. It's just a pattern, maybe not worth diving into at great length, but in the '90s, Apple pushed copyright law to the limit. They sued Microsoft for allegedly infringing on how the Mac looked and felt with Windows. I will point out that Windows still exists. Microsoft is fine. And then in the 2000s and early 2010s, Apple pushed patent law to the limit, suing Samsung for allegedly violating a bunch of patents with Android and Galaxy phones because Apple felt that they had protected the iPhone. And Samsung eventually paid about a billion dollars in damages, and those cases just sort of like went around in circles forever. But I'll point out that Android still exists. Samsung is doing just fine. Apple may have redefined patent law around like 3G and 4G licensing, but fundamentally it did not actually succeed in stopping its competitors with intellectual property lawsuits. And so you go from copyright to patent and now trade secret, which is the third kind of big intellectual property. And Apple's doing it again with OpenAI. And my big question is whether OpenAI can just pay the money the way that Microsoft and Samsung were kind of able to just pay the money. If you look at Samsung, spending a billion dollars in penalty fees to get Galaxy phones off the ground and be a major competitor in mobile is maybe the easiest and best investment that company ever made, right? But I don't know if OpenAI is the same kind of company in the same kind of moment. And it certainly seems like all of the Apple employees that went over to OpenAI maybe pushed the limit too much, right? At least from the story that Apple's telling us right now.

It's pretty crazy reading the wildest claims from the lawsuit. And you know, also the messages that were being exchanged, like one of them allegedly accessing, you know, Apple confidential information on a device and then saying, "LOL, so funny that I can access this." So yeah, there's a lot there. But I've been wondering the same thing. And I think that it really depends on Apple's willingness to be petty or be like super logical here, honestly. And when I interviewed a bunch of lawyers about this, they said Apple is a notoriously tenacious litigant. So, you know, as we've seen in those past cases, but also they really will take things far. They have a lot of money and they're willing to use it. And it really just depends on how mad they are, honestly. I think that they would potentially settle if OpenAI paid them enough. But will OpenAI be able to do that? They're already in a really tough year. They're about to IPO. All the investors are looking at their bottom line wondering when they're going to turn a profit. You know, it's a tough time to be shelling out a ton of money to Apple. So, we'll have to see what they do. I think it's going to go to trial and I think it's going to be a very drawn-out, years-long thing. And that's what a lot of the lawyers I interviewed said as well. But, you know, I could see a world in which they just figure out a way to get all this money together and pay and maybe Apple accepts it.

You know, in the Samsung patent cases, they lasted forever and sort of in the middle of it, Tim Cook was at a Code Conference and I asked him, "What are you doing? Is this accomplishing anything?" And he looked at me very seriously and he said, "Well, we think the fees for licensing standards-essential patents are out of whack." And I was like, "That is not the reason you're doing any of this, right?" Like, that's not the point. The point is that you were mad and you wanted to run this lawsuit to ground and you're going to run this lawsuit to ground no matter what the nominal reason is. And that feels like a big piece of the puzzle here, right? OpenAI has taken a bunch of Apple employees, famously Jony Ive, Apple's most famous designer, working with OpenAI on hardware devices. Tang Tan, who is OpenAI's chief hardware officer, he had a reputation at Apple for, quote, "playing fast and loose." That's from Mark Gurman at Bloomberg. He seems like the central character in the story, not so much Jony Ive, but Tang Tan. And that piece where it's a bunch of ex-Apple people maybe playing too fast and loose almost feels like it's personal. Almost feels like there's a lot of emotions involved. Talk about Tang Tan and talk about what all these folks are alleged to have done that feels like it's a little more personal than your standard big corporate dispute.

And also I will say, B, you know what you said about talking to Tim Cook. I truly believe people underestimate companies' pettiness. I really do. Like we've seen in recent years, like the OpenAI-Elon Musk lawsuit. There's so many things that could have been avoided if companies weren't trying to just be petty, which is fine. They can do that. They have enough money to do that. But I'm just saying, I think people underestimate, you know, how much that plays a part sometimes in these things. As for Tang Tan, yeah, he worked at Apple for 24 years. He was the VP of the Apple Watch. You know, he left in 2024 to work on Jony Ive's hardware company, IO, which obviously OpenAI ended up purchasing. And then OpenAI appointed him as chief hardware officer. So he had a C-suite role at OpenAI. But this is after 24 years at Apple. Now, he apparently, according to Apple's lawsuit claims, it was kind of like the mastermind of a lot of this trade secrets gathering regarding, you know, interviews that he would conduct and ask about like secret code-named projects. And then the person being interviewed would feel like maybe they were able to tell him stuff because, oh well, why would he know the name of this project or these details about it if he wasn't involved also. So they felt they could speak more freely, allegedly. You know, there were other times that, yeah, he asked, you know, hey, why don't you bring some, you know, batteries or other pieces of hardware outside the Apple office that you've worked on in the past, allegedly, so that like, you know, we can do like a show-and-tell, you know, things like that. So, it's just very interesting to kind of go through these claims. Yeah, it just seemed like he really was not worried about what was going to come of this if these claims are true.

The other major character here is Jony Ive, Apple's very famous ex-designer who worked with Steve Jobs and all of those famous projects. I would say Ive reportedly has a very testy relationship with Apple. Now that he's left, he's certainly made that clear in various interviews and statements. And he's working with Sam Altman on new devices. He made a video with Sam Altman which I can only describe as a romantic coffee date in which they described the phone and the laptop as legacy devices. It was instantly memed. I have to say the memes were amazing of that video. It's very good and they shut down like half of San Francisco to make it. I thought calling the phone and the laptop legacy devices in that video was just a straight shot at Apple, right? These are the things that he made that he revolutionized in many, many ways and he's like, these are over now. You can say a lot about whether that's true or whether that can come true. I want to talk about that in a little bit. But it's notable to me that Jony Ive is not mentioned in this lawsuit. Like there's a line Apple wouldn't cross and it's mentioning the fact that it's Jony Ive who went to OpenAI and started hiring all of his old designers who sold a big portion of his company to OpenAI and now they're trying to make hardware and allegedly stealing trade secrets. But Jony Ive, he's not part of it. We're just going to leave his name out of it. Is that because he's too famous? Is that because it's too nuclear? Is it because he's still friends with Laurene Powell Jobs? What do you make of that?

It may be more that he knew how to cover his tracks, you know. To me, I mean, it could be that he's too powerful or any of the things you said, but I really feel like it's just that he has other people doing his dirty work for him, you know? I mean, like the other stuff in this lawsuit is pretty egregious and they've found it all. So, I'm kind of wondering like if they found some really intense stuff on Jony Ive, would they really not put it in the lawsuit? Like there's some bad blood between them. I just feel like they would put it in there. I don't know. This is just speculation, but I kind of think it's just when you become, when you're a powerful enough role, you don't have to do all this stuff yourself. You just have other people doing it for you and you also know how to cover your tracks. So, to me, maybe they just didn't have anything on him.

Or he's distracted designing Ferraris no one likes or whatever it is he's doing. But he's not in this. And I do think that's notable because the reason Sam Altman would hire a Jony Ive is to make a credible claim to the next device. Whatever that category of AI-powered device is going to be, you hire the most famous designer to say, I made the iPhone and I'm going to make this thing. And then it seems like OpenAI also wanted a bunch of Apple's know-how in order to make that thing. What do you make of that? That OpenAI needed hardware know-how from Apple, or at least Apple alleges that OpenAI needed hardware know-how from Apple to make whatever the next thing is.

I think to some extent whether you're talking about trade secrets or just regular, you know, legal above-board know-how from hiring their employees, of course they needed it. I mean, they've seen a ton of hardware and AI crash and burn, and they're trying to not become the next like Humane or AI Pin or any of this. It's just it can be incredibly embarrassing to make an AI hardware device in this day and age. I mean, like chances are you're probably going to fail miserably and you're going to become a laughingstock. And so if you want to avoid that, of course you need to get the best people on your side. It's hardware is hard, as everyone says. So, you know, of course they want to get experts in there that, you know, have experience actually being incredibly successful at hardware. That's not surprising to me and I think it's a smart decision because I mean OpenAI has demonstrated in the past sometimes they don't, this is typical of every tech company. It's not just OpenAI and also every AI company. But sometimes you're a little bit disconnected from what the consumer actually wants. You know, you roll something out, no one really wants it. Okay, with software that's a little easier to pivot from, as we've seen from them like deleting their side quests and stuff, they're like, "Oh, we're not doing this anymore. We're not doing this anymore. We're rolling this into that." With hardware, you can't do that. So, it's like you better have it right from the get-go.

I'm glad you said consumer. I think that brings me to what I think is the heart of the problem for OpenAI, which is they were going to be the consumer AI company. Anthropic famously focused on enterprise. It's been lucrative for them. Maybe that's where all of the money is. But OpenAI was going to take down Google, maybe through Bing, maybe through its own app. They were going to be a consumer company. And the only reason you would make hardware is to go attack the consumer, to go attack the iPhone. So OpenAI's ambitions, at least as I could see them, were first to take market share from Google, which is one of the most lucrative businesses in the history of the world, and then to go attack the iPhone, which is the most famous and culturally dominant tech product that has ever existed. I don't know how they can do either of those things. It doesn't seem like consumers even want these products or want AI at the scale. I don't know where that revenue comes from in consumer and the college students are all booing AI at graduation. Does OpenAI just need to pivot to enterprise? Do they need to spend their time spinning their wheels at consumer hardware devices before they figure out their business?

OpenAI has pivoted so many times internally and their most recent pivot was that they were going to focus on their key revenue drivers which are enterprise and coding. They said that a million times. They folded Sora, Atlas, you know, the sexing feature. It feels like years ago, but crazy that that was like, you know, in the past year. Anyway, yeah, they've done a lot of this. And so, everyone thought, okay, they're going for it. They're doing enterprise because that's the tried-and-true money maker here, especially in a year that they're going to IPO. To be fair, yes, they had already planned to do the hardware device before this whole like pivot and, you know, cutting out the side quest. I guess they can't afford to cut out this potential side quest because they've already spent a lot on it. It's happening kind of no matter what. So now they're just kind of trying to make it as successful as it can. But it is interesting to me because I've only been on the AI beat for six years. That is a long time in AI, but you know, maybe I'm missing something. But I just do not see a market when everyone is buying an OpenAI hardware device. I really don't. If I'm wrong, we can come back on here and laugh at my clip from, you know, July 2026. But like, yeah, smart speaker. Okay, maybe people buy it just to be a smart speaker. Kind of like, you know, Google Home. That's what I use mine for, basically, just a smart speaker. And I think it's going to be one of those things that a few people really, really, really love and that the general public probably does not adopt because it's difficult to get them to adopt anything unless all their friends have it. There's a social aspect and, you know, you're going to be a laughingstock with green text if you don't have an iPhone. You know, no hate to Android people. I'm just saying, you know, sometimes you don't get added to the group text or something. It's sad. It's sad and it's not right. But, you know, I'm just saying there's got to be some like public buy-in if you're going to be adopting a new piece of hardware a lot of times, unless you just love tech, which a lot of people will buy this just because they love tech. But if you're going for the general public, which is what I think they would need in order to make this much money back, I don't know.

We founded The Verge at the start of the smartphone boom. And, you know, just thinking back on it, it was never a question of whether people would adopt smartphones. That was obvious. It was obvious to us, maybe it wasn't obvious to everyone, but we were in it. And the only thing that wasn't obvious was who would win, right? And after a while, it became obvious that Apple would win. Like, how many iPhone killers did we cover 15 years ago? And they all came and went and they looked like new operating systems. Windows Phone existed. The Palm Pre ran an operating system called WebOS. Android was ascendant. Nokia tried to do its own thing and then they pivoted to Windows Phone. And at the end of the day, we kind of ended up with iOS and Android and everything else fell into line. And maybe the whole tech industry hates this and they hate paying the app store fees, but this feels like that same kind of moment, right, where OpenAI is going to put out a hardware device. It's going to run its own operating system. Elon Musk is fulminating about Starlink and xAI putting out their own phone, maybe running their own operating system. Apparently, in the run-up to IPO, they were showing it to people. And I just have really dumb questions that to me mirror the same questions we asked about new smartphone operating systems 15 years ago. Are you going to make a Gmail client? Is it going to have Instagram? Because if you don't have those things, you don't actually get to replace the phone. And if you don't replace the phone, well, I've got the beta of iOS 27 on my iPhone right here. And Siri AI is definitely good enough to just get through the day. Yeah, that's what really gets me here is because the smartphone replaced the dumb phone. So, okay, it's like you got to have something way better than the smartphone. Are you going to? Doubtful, but may, you know, we'll see. But the other thing that gets me here is how many devices OpenAI is reportedly working on. I think what's their lineup they're working on? Reportedly five hardware devices and the screenless smart speaker is the first one. How can they come up with five? That's what I want to know. Like what are the five? And shouldn't you be putting all your resources toward one? It's already hard to make one. I'm just, I'm a little dubious of five successful AI hardware devices. Even one is like a long shot, but five is a little bit crazy.

I'm sure there's a lot and some will come and go. The thing that I think about particularly when it comes to Jony Ive and his approach to hardware, which is familiar at this point, we've watched him launch a lot of hardware at Apple. Ive tends to focus on new input methods for new devices. So the iPod had the click wheel and that really defined the form and function of the iPod. The iPhone has a multi-touch screen and that really defined the form and function of the iPhone and then the iPad. If you'll remember the Apple Watch, they launched it with great fanfare about the scroll wheel on the side. I don't know if that came to pass, but they really thought that was a big deal when they launched the Apple Watch. This is Ive's go-to path, right? We find a new input mechanism. We're going to define the product around it. I know exactly what that should be for AI, right? It's natural language input. You can just tell the computer whatever you want. It'll figure it out and it'll go off and do it for you. But we're however many years into the AI revolution, right? We're three or four years into this version of it and it doesn't quite work yet. I think this is why the AI devices keep failing as you keep mentioning because you can talk to a Humane Pin all day and all night and it will pretend to understand you and then not actually be able to do the things on the other side of it. That feels like the problem in AI right now. There's these flashes of brilliance and then there's these limits of capability. Where do you think we are in that process of figuring out exactly what it can and can't do? And how do you think that limits a hardware device?

We're still in the midst of it. I mean, I personally use AI all the time, obviously, in my personal life to test things out, see what it can do, you know, month to month. I see how it's improved, at least from my own personal things that I try. It's all anecdotal, obviously. But, you know, just the other day, I was trying to look up a lot of addresses of companies because I wanted to kind of like map something out and every, I would say like 80%, maybe 60%, 60% of the ones that I looked up were completely wrong. Just wrong. It made me a whole table and it was like, "Yeah, don't worry. All these are definitely correct." And then 60% wrong. I'm like, "A lot of these are wrong." They're like, "Oh, sorry, my mistake." Yeah. So, I mean, I don't know. Your favorite. Yeah, it's like, oh yeah, you're right. You caught me. So, I mean, obviously, yeah, it's right about a lot of stuff a lot of the time. But what I wonder is there are certain tasks that as we all know from like, you know, when we were an intern back in the day or if we've ever had an intern, there are certain things just easier to do yourself if you're not 100% sure the person is going to get it right. And so what I wonder is for a hardware device like this, there are a lot of low-stakes things you can ask it and you know it'll be fine. But for higher-stakes things or things that it's simpler to look it up yourself or do it yourself even, then put it out there when it's going to be a potentially wrong answer. That's what I wonder like is this going to end up like a Google Home type of situation where you're just using it as a speaker and you're asking it what the weather is because it doesn't really matter that much if it's wrong. But as we know, it can only really be super useful if you can trust it with that higher-stakes type of question. And so, you know, like saying, "Hey, what time does Emily's flight get in tonight?" Because she's staying with me.