Apple's 'thermonuclear' Response to the Openai Threat

Dow Jones07:00

Steve Jobs declared "thermonuclear war" on Google's Android operating system in 2010, calling it a "stolen product." Now, his successor is going to battle against Apple's new most dangerous rival.

In one of his last acts as Apple's chief executive before successor John Ternus takes over, Tim Cook fired a missile at OpenAI. In a lawsuit filed Friday, Apple alleged that a senior OpenAI executive, who once sat atop Apple's own product design team, was involved in a monthslong campaign to steal Apple trade secrets.

Although it isn't yet clear what evidence the company has to back up all its claims, the suit lands before OpenAI has released a product and as the technology industry races to build artificial-intelligence-powered devices that can move society beyond the smartphone era. The winner could dominate the future just as Apple's iPhone has ruled the consumer market for the last 20 years.

"I am not afraid of Apple, but I have tremendous respect for them," OpenAI CEO Sam Altman posted on X Saturday.

Big tech rivals have long tried to supplant Apple, but thus far Google, Samsung, Meta, Microsoft and Amazon.com have all failed. Now, OpenAI is emerging as a new threat. It has built powerful AI models and is working toward an unspecified "family of devices" to run them, devices that could supplant Apple's.

Apple's innovation engine failed to develop hit AI products and features, leaving it vulnerable to new entrants. Its suit could be an attempt to throw sand in the gears at OpenAI, company observers say, to slow poaching of Apple staffers, for instance.

Friday's lawsuit has echoes of the ones Apple filed against various Android ecosystem players beginning in 2010, a legal battle royal with hardware makers producing rival phones that played out over eight years.

The central allegation then as now was that a rival stole Apple's innovations. Apple said Samsung "slavishly copied" the iPhone with smartphones it was already selling by the millions, which Samsung denied. The companies settled in 2018 after a long, costly battle.

At the center of each case Apple has pursued was a perceived breach of trust. Google's then-chief executive Eric Schmidt sat on Apple's board as his company developed Android. "I'm going to destroy Android, because it's a stolen product," Jobs told biographer Walter Isaacson.

Apple alleges in its new suit that "at every level...OpenAI has been stealing Apple's trade secrets." A more junior employee appeared to cross the line by using an Apple employee's login to access Apple servers. But Apple also accused OpenAI's hardware chief, Tang Tan, of soliciting trade secrets from its employees interviewing for jobs, and encouraging them to bring "actual parts" from Apple for "show and tell" sessions at OpenAI. Tan worked at Apple for 24 years, rising to vice president of product design.

But bringing parts to an engineering interview isn't unusual, say people familiar with the tech hiring process. Interviewers want candidates to talk through their work. The question is whether the parts were sensitive, something Apple doesn't offer evidence of and is seeking discovery to determine.

A spokesperson for OpenAI said, "We have no interest in other companies' trade secrets. We remain focused on building innovative technology that empowers people everywhere." Tan and a more junior employee, Chang Liu, didn't respond to a request for comment.

At Apple, Tan worked very closely with Jony Ive, its famous industrial design chief. Ive left Apple to build his own design firm, later poaching Tan. OpenAI bought that company, io Products, in 2025 to spearhead its own device development efforts.

Bedfellows can become enemies very quickly in tech. OpenAI made the io acquisition -- revealing its intention to wean consumers off smartphone screens -- a year after announcing a partnership with Apple to integrate ChatGPT into some parts of the iPhone.

The Wall Street Journal's parent company, News Corp, has a content deal with OpenAI.

Bigger companies have so far failed to dent Apple's dominance. Amazon's Fire smartphone and Microsoft's Windows Phone operating systems were both duds.

Mark Zuckerberg has failed to end-run the iPhone more than once, including his recent attempt to make an alternate tech ecosystem called the Metaverse, renaming and reorganizing his company around the idea. It hasn't caught on. Ray-Ban Meta smartglasses are a popular new consumer device, but sales are a fraction of the iPhone's.

Elon Musk has also chafed at Apple's control of the digital economy. A unit of SpaceX is suing Apple for disadvantaging its AI app, and the company is now prototyping its own smartphone-like AI device. Apple has said that its App Store relies on algorithms and expert curation and doesn't suppress rivals.

The irony of Apple's case against OpenAI is that Apple itself has so frequently been accused of stealing other companies' ideas that it has spawned a new verb, "sherlocking," that is well-known in the tech world.

Apple is trying to catch up in AI. Its Siri chatbot got a long-awaited makeover that will be available to consumers in the fall. It wasn't able to develop the new Siri AI itself, relying instead on Google to power it.

If the new Siri AI is free and has better functionality, will iPhone users keep paying for ChatGPT?

It also enjoys hardware advantages. Under the hood in each Apple device are powerful, Apple-designed chips capable of much more than just powering the new Siri. Apple already has billions of users carrying its devices, particularly the iPhone. Companies building the most sophisticated AI models, if they want to reach consumers, will likely have to go through Apple. And pay its toll.

Perhaps Cook can buy Ternus time by siccing Apple's lawyers on a top AI rival. But Apple will still have to win the AI device battle to come. That falls to product development, an area where Ternus will have to surpass his predecessor if he wants to maintain Jobs's legacy.

Write to Rolfe Winkler at Rolfe.Winkler@wsj.com

 

(END) Dow Jones Newswires

July 12, 2026 19:00 ET (23:00 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.

At the request of the copyright holder, you need to log in to view this content

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap
Leave a comment