Apple Lawsuit Accuses OpenAI of Stealing Trade Secrets and Poaching Employees

In 2024, Apple and OpenAI got married in a shotgun wedding on stage at WWDC. Tim Cook put ChatGPT inside the iPhone while Sam Altman watched from the audience. They were the unambiguously gay duo, and together they thought they could rebrand artificial intelligence to Apple intelligence with a marketing campaign so effective it inspired me to buy an Android phone. But it only took 2 years for these two companies to become mortal enemies. Last Friday, Apple filed a 41-page lawsuit calling OpenAI's hardware business rotten to its core. With bombshell allegations of trade secret theft, behind the scenes Scam Altman was doing what Scam Altman does

best, is scamming, allegedly. What Apple failed to realize is that he doesn't just want to do business with Apple, he wants to eat the apple. In today's video, we'll take a look at OpenAI's hardware strategy and the craziest claims in this lawsuit. It is July 17th, 2026, and you're watching The Code Report. Apple is terrified of OpenAI. OpenAI has already poached over 400 Apple employees, but more importantly, OpenAI has plans to get into the hardware game. Not long ago, they bought Jony Ive's stealth startup IO for $6.5 billion. That's over $3 billion per lowercase letter. Jony Ive spent about 30 years at Apple and worked closely with Steve Jobs to create the visual

language for the iPhone, iMac, iPod, and so on. But now he's working with Sam on a device that wants to make your iPhone obsolete. And no official details have been released, but we just got a leak a few days ago, and apparently this futuristic device is a mobile screen-free home smart speaker. A quote, OpenAI believes the product's defining feature will be its personality and ability to connect on a human-like level with users. The speaker incorporates mechanical elements that can move on their own, creating a sense that it's alive and not just an object responding to commands. You heard that right. It sounds like they're basically just building an Alexa smart speaker with that voice they stole from Scarlett Johansson in the Jony Ive design

language. But I highly doubt that's going to be a product because I've watched every single Husk IRL video. Tell me a fun fact about Mike. Sure, a fun fact about Mike Hogg is that he and Tony grew up surfing together. But Apple doesn't think OpenAI is playing fair when it comes to their hardware strategy, which brings us to last Friday when Apple filed the divorce papers accusing OpenAI of trade secret theft at every level. The lawsuit names OpenAI IO and two ex-Apple employees including Tang Tan, OpenAI's hardware chief, and former Apple vice president.

The lawsuit claims that Tan told Apple engineers interviewing at OpenAI to bring \{quote\} actual parts for show and tell. Most interviews like this just have you invert binary tree, but at OpenAI they want you to show up with stolen prototypes. But it gets better because Apple says OpenAI also circulated a cheat sheet teaching recruits how to dodge the dreaded walkout. You know, where security escorts you out the door the moment you resign. And that's important to OpenAI because it would allow you an extra two weeks to work at Apple and steal confidential data from them. But now it's time to meet Shang Lu, allegedly the worst spy in corporate history. This guy was a senior electrical engineer at

Apple who got the job at OpenAI and then found an authentication bug in Apple systems. He celebrated it on unencrypted channels and texting a co-worker, \{laugh out loud\} I found out I can access the network storage, so funny. To which she replied, I'm ready. And what's even better is he allegedly did the accessing from her Apple-issued work laptop, which of course is owned and monitored by Apple and collected on your way out. Then, hours after quitting, he allegedly texted, I still have another computer, referring to a second Apple machine that he planned to keep using even after he quit. And he would have gotten away with it, too, had Apple not found that message on the company laptop. And this

whole situation has proved that just because you're a 10x engineer, it doesn't necessarily mean that you're also going to be a 10x criminal. But at the end of the day, I don't feel that bad for Apple because you might remember 50 years ago is Steve Jobs went on a tour of Xerox Park. And after seeing things like the GUI and the mouse, he had his engineers steal these ideas. And then he stole this quote from Picasso, "Good artists copy, great artists steal." The worst kept secret in tech is that the only way to get ahead is to steal. But before you can steal effectively, you need to have the right computing platform. Like Hyperagent, the sponsor of today's video. It's a

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credits to the first 500 people to sign up. Reclaim yours at the link below. This has been the Code Report. Thanks for watching, and I will see you in the next one.