Apple Lawsuit Unlikely to Halt OpenAI IPO, Poses Risk to Hardware Deal, Says Lawyer

Apple's trade secret lawsuit against OpenAI is unlikely to derail the artificial intelligence leader's highly anticipated initial public offering, but it casts a significant shadow over its recent hardware acquisitions, according to a securities law expert.

Ross Carmel, an IPO expert and partner at Sichenzia Ross Ference Carmel LLP, told Investing.com that while the litigation is notable, he expects it to be treated as a standard disclosure item for potential investors rather than a fundamental obstacle to a public listing.

Apple Alleges Coordinated Theft

The lawsuit, filed in the Northern District of California, names OpenAI, its hardware subsidiary io Products, and two former Apple employees as defendants. Apple accuses Tang Tan, now OpenAI’s Chief Hardware Officer, and technical staffer Chang Liu of systematically stealing confidential company data, including specifications for unreleased hardware and sensitive supplier information.

Crucially, Apple's complaint alleges the misconduct was "normalized and exemplified by leadership," directly implicating OpenAI's corporate culture. The suit targets not only the individuals but also io Products, the hardware startup co-founded by former Apple design chief Jony Ive that OpenAI acquired for approximately $6.5 billion.

Impact on IPO and Hardware Ambitions

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For a public offering, the lawsuit will likely be detailed as a risk factor in OpenAI's registration statement, a common practice for companies facing litigation. "Generally, this would be a disclosure item in the registration statement and a risk factor," Carmel stated, adding that he does not believe it will materially obstruct OpenAI's path to going public.

However, the litigation poses a more direct threat to the io Products acquisition. Carmel noted that the legal uncertainty could negatively affect how investors value the deal. "[It] provides uncertainty and litigation risk on the acquisition, and has the potential to devalue the acquisition itself in an investor’s mind,” he said. An expensive settlement or an adverse judgment could have a material financial impact on OpenAI.

Market Context and Outlook

While intellectual property disputes are common in Silicon Valley, Carmel noted this case stands out due to the alleged brazenness of the actions and the prior partnership between the tech giants. Despite the high-profile nature of the suit, he believes the immense investor appetite for AI will likely outweigh the legal risks.

Carmel concluded that given the scale of the technology's potential market, which is "so large and not yet capable of really being calculated accurately," there is no “real impediment to OpenAI’s listing plans.” He advised that companies preparing to go public should conduct thorough IP audits to verify ownership of all intellectual property, a strategy previously employed by firms like Meta and Uber.