Report: Apple's OpenAI Lawsuit Threatens iPhone Rival Plans

[LogicalApex]

No, Apple is suing them for theft. That's it.

Apple would have to sue any company for IP theft, irrespective if they were worried about the thief being a valid competitor or not. Because to not sue would be to show that "it's OK to steal from Apple", and no company can allow that, especially with OpenAI being literally based down the road from them.

If you neighbor steals your car, do you take legal action again him/her because you are worried they might be a better driver than you, or because they stole your property?

The narrative on sites like this that it is a means of reducing the risk of a competitor is simply clickbait. A salacious narrative, but it's soap opera narrative. The implication is that Apple would not take such a legal action if they weren't worried about legitimate conception, which is nonsense.

OpenAI do not have a product to compete with the iPhone. The various AI wearable pins and badges shipped by other "dedicated AI devices" flopped. The threat of legitimate competition is not a driver behind the action. The driver. behind the action is to show that Apple will not allow people to steal from them.

Again, not accurate. It sounds like you're mixing up trademark with patent laws. Which is understandable since they are both covered by the US Patent and Trademark Office (US PTO).

Trademarks require swift lawsuits on use to keep from the trademark losing its novelty and no longer being enforcible, the same rule doesn't apply to patents. Patents are defined as to their scope and holders are allowed up to 6 years from first discovering infringement to sue. They also aren't required to sue to maintain their patent.

Trademarks: https://legal.thomsonreuters.com/blog/trademark-litigation-101/
Patents: https://www.nolo.com/legal-encyclop...-in-which-to-sue-for-patent-infringement.html

Apple is also not just alleging theft of potential IP here. They are also alleging theft of trade secrets (such as vendor lists and relationships) which don't require lawsuits to protect (they can be enforced by US law enforcement as criminal offenses).

 

[Gorlammi]

Anyway, Open AI is likely to go bankrupt. The future is smaller LLMs that can be run locally. Apple, Gemini, perhaps Claude (if only because it's integration tools are so good), and some Chinese AIs are going to be more financially viable IMO.

The future is some tasks being offloaded to local models, while more advanced tasks will continue to demand more and more cloud compute. And even as compute catches up to the tasks of today, the tasks of tomorrow will push for more. The trick will be getting as many everyday tasks as possible onto manageable compute so it isn't so expensive to provide.

 

[subjonas]

Jobs would probably be spinning in his grave if he found out Jony Ive is in cahoots with a company that’s now brazenly committing corporate espionage against Apple.

I think it's still alleged.

 

[Gorlammi]

I remember when Steve Jobs originally founded NeXT, he had to sign an agreement with Apple where Apple was allowed to review NeXT’s prototypes to ensure they weren’t infringing on any of Apple’s patents.

Jobs would probably be spinning in his grave if he found out Jony Ive is in cahoots with a company that’s now brazenly committing corporate espionage against Apple.

With all these people constantly jumping ship from one company to another it's impossible for some privileged information to not make its way into competitors hands. It's just a matter of how much of it each company is willing to tolerate, and when that line is crossed is when the law suits happen. Don't over think it.

 

[Smartuser]

I think it's still alleged.

That's already covered by a triple conditional: Would, probably, and if.

 

[Smartuser]

With all these people constantly jumping ship from one company to another it's impossible for some privileged information to not make its way into competitors hands. It's just a matter of how much of it each company is willing to tolerate, and when that line is crossed is when the law suits happen. Don't over think it.

Drives full of files with specific information aren't going to be casually transferred. That's just downplaying the racket.

"Can't blame a guy switching to a new bank for taking a few gold bars with him."

 

[Johns12]

Does anyone remember when Amazon was losing money left and right and most people were saying it's going to go bankrupt and investors were crazy to put money into it? Who knows what will happen to these AI companies.

 

[subjonas]

That's already covered by a triple conditional: Would, probably, and if.

Just the presence of those words in the sentence doesn't mean everything in the sentence is conditional. Looking at how the sentence is constructed, "probably would" is just a modified predicted action given the "if". But "if" is not the conditional premise of committing corporate espionage, it's the conditional premise of Steve finding out about it. Given the context and the addition of "now brazenly", committing corporate espionage reads as a given assumption.

 

[Smartuser]

Does anyone remember when Amazon was losing money left and right and most people were saying it's going to go bankrupt and investors were crazy to put money into it? Who knows what will happen to these AI companies.

Most great companies lose money at first. Not all companies that lose money early on are great. Amazon had a value proposition from he start and their moat was that they moved first. What's OpenAI's moat right now?

Just the presence of those words in the sentence doesn't mean everything in the sentence is conditional. Looking at how the sentence is constructed, "probably would" is just a modified predicted action given the "if". But "if" is not the conditional premise of committing corporate espionage, it's the conditional premise of Steve finding out about it. Given the context and the addition of "now brazenly", committing corporate espionage reads as a given assumption.

"Would probably" isn't 100%, and nothing is assumed.

"If I were to find out that Brad Pitt has been shamelessly exploiting people for years under the assumed identity of "Mark Zuckerberg", I'd probably throw a ripe tomato at him."

No assumption there, and no guaranteed consequences either. And the "alleged" part about the lawsuit is technically correct (the best kind of correct), but can be pedantic in some situations. We're not in court or acting in a press position when we post on this forum.

In any event, I doubt that Jony Ive would know anything one way or the other.

 

[Sasai Akira]

This is an usual thing among big tech companies. There are thousands of Apple’s ex employees in the industry. Microsoft, Google, Tesla…… as well. However, if this is true, Open AI must learn how to produce cutting edge devices from the beginning.

 

[bgillander]

I don't understand the "iPhone rival" label.

To be an iPhone rival, you need to invent an operating system better than iOS, and then an entire supporting ecosystem of devices and operating systems and cloud services and content.

The hardware is the absolute least of it. Building another generic slab and slapping Android on it is just another entry in the vast sea of Android crap.

What makes you think they are using Android? Did I miss that announcement?

I thought their whole shtick was supposed to be their own "magical AI OS" running on some "magical Jony Ive hardware". Specifically to get everyone on their ecosystem, I assumed.

 

[dypeterc]

Considering that OpenAI is teetering on the edge of insolvency, this lawsuit will grind to a halt future funding and any progress in their AI strategy. OAI is already burning through cash at an alarming rate. This lawsuit will just accelerate this. Apple will basically sue them into oblivion

 

[StuBeck]

Context. This is all about IP. Thats what this whole thing is about.

Then the article is terribly written.

 

[StuBeck]

There would be nothing to back up a suit against Apple for this, unless there's explicit proof written somewhere that says that they planned to sue OpenAI in order to cast a shadow over the company in order to prevent employees from wanting to move there. Apple isn't responsible for how people perceive their prospects at another company.

And if they have evidence that OpenAI was stealing trade secrets (which they say they do), it makes sense that they'd become more skeptical of people who move there now. They can't prevent them from moving, but they can tighten NDAs and remind people of the consequences of disclosing confidential information.

Then this article saying that people won't want to move there is ridiculous, which is all I was saying.

 

[Timpetus]

Most great companies lose money at first. Not all companies that lose money early on are great. Amazon had a value proposition from he start and their moat was that they moved first. What's OpenAI's moat right now?


"Would probably" isn't 100%, and nothing is assumed.

"If I were to find out that Brad Pitt has been shamelessly exploiting people for years under the assumed identity of "Mark Zuckerberg", I'd probably throw a ripe tomato at him."

No assumption there, and no guaranteed consequences either. And the "alleged" part about the lawsuit is technically correct (the best kind of correct), but can be pedantic in some situations. We're not in court or acting in a press position when we post on this forum.

In any event, I doubt that Jony Ive would know anything one way or the other.

You get a like for referencing the best line from all of a great show 😀

 

[wilhoitm]

I don't understand the "iPhone rival" label.

To be an iPhone rival, you need to invent an operating system better than iOS, and then an entire supporting ecosystem of devices and operating systems and cloud services and content.

The hardware is the absolute least of it. Building another generic slab and slapping Android on it is just another entry in the vast sea of Android crap.

Open AI will just vibe code all of that in 1 day! 🤣 And hardware is actually much harder than you think because you cannot just vibe code hardware over your lunch hour! 😃

 

[vantelimus]

Most great companies lose money at first. Not all companies that lose money early on are great. Amazon had a value proposition from he start and their moat was that they moved first. What's OpenAI's moat right now?

"First mover advantage" is a canard. "Best followers" are the ones who usually win.

Amazon wasn't the first e-commerce site. It wasn't even the first book seller. That would be Book Stacks Unlimited, which opened in 1992 as a dial-up BBS. Book Stacks failed to scale its logistics and was ultimately bought out by Barnes & Noble. There were a bunch of e-commerce sites which launched around the same time as Amazon.

As I understand the term, Amazon had no moat until the 2005 when they launched Prime. Prime created a barrier for the customer to comparison shop online. Once a consumer was paying upfront for "free" shipping, they preferred Amazon so that they could get their money's worth out of their Prime membership.

Amazon's early success was partially due to $8 million in Series A funding from KP, one of the earliest internet IPOs in 1997, and a giant $1.25 billion convertible debt raise in early 1999. Their war chest was huge and kept them going when others fell by the wayside in the wake of the dot-com crash.

The other fundamental reason Amazon succeeded is very relevant to this discussion. They had a good business model. Books were an easy first product. They carried no inventory. They were one of the first e-commerce websites to accept credit card payments. They paid their book distributors net 30 to net 60. That gave them an average 40-day float and they used it successfully.

It is true that OpenAI has no moat. Their main advantage is that they are backed by huge players who have a vested interest in not losing their $180 billion that has been poured in. Chief among those is $50 billion from Amazon, $30 billion from NVIDIA, $30 billion from Softbank, $13 billion from Microsoft, and a two handfuls of the biggest names in VC and PE.

 

[Smartuser]

It is true that OpenAI has no moat. Their main advantage is that they are backed by huge players who have a vested interest in not losing their $180 billion that has been poured in. Chief among those is $50 billion from Amazon, $30 billion from NVIDIA, $30 billion from Softbank, $13 billion from Microsoft, and a two handfuls of the biggest names in VC and PE.

With the possible exception of NVIDIA, these investors look clueless to me.

Amazon has a great business, but makes bad to middling products and has had a smartphone flop. IIRC, SoftBank finances WeWork. Microsoft is hit or miss and has thrown their considerable weight behind winners like the Zune, the Kin phones and recently the Xbox. The rest will probably be the usual bunch of wide-eyed investors.

I don’t trust any of these guys to be able to distinguish between AI pin level crap and actual good products.

 

[Non-Euclidean]

It is true that OpenAI has no moat. Their main advantage is that they are backed by huge players who have a vested interest in not losing their $180 billion that has been poured in. Chief among those is $50 billion from Amazon, $30 billion from NVIDIA, $30 billion from Softbank, $13 billion from Microsoft, and a two handfuls of the biggest names in VC and PE.

Were those NVIDIA and MS investment real, or AI circle jerk investments for equity on equipment/service purchases?

 

[Non-Euclidean]

AI Leadership waking up to how people really feel

https://www.wsj.com/us-news/the-ai-backlash-has-tech-executives-fearing-for-their-lives-30c43972