OpenAI’s fight with Apple is really about Silicon Valley’s war for talent

OpenAI, for the second time in the past few months, is facing a legal battle that could alter the company’s trajectory. This time, it is squaring off against Apple in a fight whose origins can, in some ways, be traced to a time long before the AI giant existed.

Apple’s case against OpenAI centers on accusations that the company stole Apple’s intellectual property. The iPhone maker alleges that OpenAI asked former Apple employees and prospective recruits to bring information about unreleased products with them. OpenAI denies that claim, saying in a statement that it has “no interest in other companies’ trade secrets” and would “remain focused on building innovative technology.”

The unspoken part of the feud, however, concerns OpenAI’s pilfering of Apple’s workforce. To date, more than 400 former Apple employees have jumped ship, lured by steep compensation packages. Apple has recently begun offering larger-than-normal retention bonuses to prevent further defections.

Poaching was once relatively uncommon in Silicon Valley. But as a new generation of tech giants becomes established, the rules may be changing.

Job hopping barriers

Silicon Valley’s questionable anti-poaching history reaches back at least to 2007, when Steve Jobs emailed then-Google CEO Eric Schmidt about Google’s attempt to recruit an Apple engineer. “I would be very pleased if your recruiting department would stop doing this,” Jobs wrote. Schmidt forwarded the email to unknown parties, adding “Can you get this stopped and let me know why this is happening?”

That same year, Palm’s CEO wrote to Jobs that an anti-poaching agreement would be “likely illegal.” Intel chief executive Paul Otellini also composed an email disclosing an agreement with Google. “We have a handshake ‘no recruit’ between eric and myself. I would not like this broadly known,” he wrote.

All of these emails came to light following a 2010 antitrust action brought by the Department of Justice against Adobe, Apple, Google, Intel, Intuit, Pixar, Lucasfilm, and eBay. The civil suit alleged that the companies had colluded not to recruit one another’s employees, violating the Sherman Act, a federal law prohibiting anticompetitive business practices. The Justice Department said the agreements reduced workers’ wages and stock bonuses.

The companies settled the case. Months later, workers filed a civil class-action lawsuit over the practice, seeking $3 billion. Within three years, all of the tech companies had reached settlements without admitting guilt. Ultimately, more than 64,000 workers received an average payment of $5,770 each.

Today, there is no formal agreement among tech firms restricting them from recruiting one another’s workers. The practice nevertheless remains relatively rare.

A new breed

Up-and-coming tech firms, however, do not appear inclined to follow that norm. In the 2000s, Meta lured hundreds of employees away from Google, enraging executives who demanded that Sheryl Sandberg stop the practice. She refused. More recently, Meta has actively recruited from AI rivals, hiring key employees from Apple, OpenAI, and other startups.

OpenAI, which was founded in 2015, now appears to be following the same recruitment playbook. High-profile Apple employees who have joined Sam Altman’s company include:

• Tang Tan, Apple’s former vice president of product design
• Paul Meade, who oversaw the Vision Pro headset and smart-glasses projects
• Chang Liu, who worked on the iPhone for more than eight years

Jony Ive, who left Apple years ago to start his own company, is also now with OpenAI after it acquired his io startup last year.

There have been no reports of other emerging tech giants poaching workers from Silicon Valley’s established companies, but that does not mean the practice is not happening. Anthropic has filed paperwork with the Securities and Exchange Commission for an IPO and will face pressure to keep investors happy. High-profile hires could help. Elon Musk, who runs SpaceX, also has a long history of disregarding industry conventions.

A different generation of tech companies is threatening to become Silicon Valley’s new ruling class. Should they succeed, the question is whether they will discourage job hopping as their predecessors did-or turn the competition for top talent into a free-for-all.