Can an Apple Lawsuit Derail OpenAI's Hardware Plans?
Apple filed a trade secrets lawsuit against OpenAI, accusing it of stealing confidential information. OpenAI denies the claims. The lawsuit could delay OpenAI's hardware project and affect its upcoming IPO.
Apple recently filed a trade secrets lawsuit against OpenAI, alleging a pattern of misconduct aimed at obtaining confidential information from current and former Apple employees. In response, OpenAI stated it is "not aware of any evidence that this complaint has merit."
The lawsuit casts a shadow over OpenAI's ambitious hardware plans, which include a mobile smart speaker developed in collaboration with Jony Ive. OpenAI has also confidentially filed for an IPO that could occur by the end of this year or early next year.
On a recent episode of TechCrunch's Equity podcast, journalists discussed the potential impact. Sean O'Kane suggested that the lawsuit could naturally delay OpenAI's hardware work, and that may have been part of Apple's intent. "They don't do this stuff willy nilly," he said. Kirsten Korosec predicted that OpenAI would likely fight the lawsuit rather than settle quickly, having learned from its recent courtroom victory against Elon Musk that it can endure the cost and embarrassment of a trial.
The complaint notes that over 400 former Apple employees now work at OpenAI, representing a significant talent drain. While small in percentage terms, it is notable.
The lawsuit could affect IPO pricing by making OpenAI's hardware division seem riskier to investors. It also poses reputational risks, similar to the embarrassing revelations during the Musk trial. However, OpenAI's experience with litigation may make it more resilient.
