Max Headroom 
OpenAI’s ambitions to build a hardware rival to the iPhone are already running into trouble because of Apple’s trade secret lawsuit, according to Bloomberg‘s Mark Gurman, who argues the damage is showing up well before any court ruling.
Apple sued OpenAI last week, accusing the company of pushing former employees, and even people it was trying to recruit, to hand over details on unreleased products. The suit also claims OpenAI coached new hires on how to dodge Apple’s exit-interview security checks using a document tied to former iPhone design chief Tang Tan. Apple is asking the court to order OpenAI to stop the alleged conduct, destroy any proprietary material it obtained, and pay damages.
A courtroom resolution could take years, Gurman says, but he argues the suit is doing damage now, squeezing OpenAI’s ability to recruit and creating drag on its device work long before a judge weighs in. OpenAI has declined to discuss its hardware roadmap directly, though in response to the suit the company said it has “no interest in other companies’ trade secrets” and remains focused on its own technology.
The scale of the talent drain is a major part of why this matters to Apple. More than 400 former Apple employees now work at OpenAI, including former Apple design chief Jony Ive, and Gurman says the company poached so heavily from Apple’s iPhone product design group specifically that Apple had to rebuild parts of the team. Apple has responded with bigger retention bonuses and executives personally working to keep engineers from leaving.
The trade secret situation has apparently become one of Apple’s biggest internal concerns of the past several months, ranking alongside tariff exposure and the ongoing memory chip shortage. In its own court filing, Apple frames the case as narrowly about trade secrets and describes OpenAI’s hardware business as still nascent, arguing that discovery is needed to expose “the pervasive theft of Apple’s trade secrets.”
The lawsuit is said to already be reshaping OpenAI’s hiring, independent of anything a court eventually decides. Apple employees weighing a move to OpenAI may now think twice given the added scrutiny, and even interviewing there could draw attention from Apple’s security team, which could keep more engineers at Apple and slow the flow of institutional knowledge to OpenAI.
Former Apple employees are likely to grow more guarded about discussing prior work, with managers avoiding technical questions that risk touching Apple’s confidential information. New legal reviews, tighter internal controls, and compliance training could pull engineers away from actual development, while senior OpenAI leadership spends time on discovery and depositions.
Given Apple’s leverage over Asia’s consumer electronics manufacturers, suppliers may be reluctant to deepen ties with OpenAI for fear of jeopardizing bigger, longer-standing relationships with Apple or getting pulled into the litigation themselves.
Bloomberg Intelligence wrote that “Apple is likely to secure targeted preliminary relief tied to OpenAI’s device effort.” Any such order would likely require disputed materials to be isolated, evidence preserved, and compliance certified, which could slow OpenAI’s hardware plans further. In the longer term, if Apple can prove its trade secrets made it into OpenAI’s products, OpenAI could be forced to redesign them.
Regardless, a person familiar with OpenAI’s plans told Gurman the company still expects to announce its first hardware product this year and release it in 2027, though that could shift as OpenAI reviews Apple’s claims. That device is reportedly far along, but building out a wider family of products, the kind Bloomberg previously described as central to OpenAI’s device ambitions, will likely get harder. OpenAI has reportedly explored categories including smart speakers and wearables with an iPhone-style device as the eventual goal, but a simpler, non-phone product is expected to ship first.
This article, “Report: Apple’s OpenAI Lawsuit Threatens iPhone Rival Plans” first appeared on MacRumors.com
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Bloomberg, Apple Lawsuits, Mark Gurman, OpenAI
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