Apple and OpenAI Are Now Racing to Build the Same Device

In June, Apple unveiled a redesigned Siri for iOS 27. The new assistant could hold conversations, analyze what was on screen, and route queries to whichever AI model the user preferred. It could not, however, be your friend. Craig Federighi, Apple's software chief, was explicit about where the line was drawn.

Many of the existing chatbots, they're really focused on engagement to a large degree and sycophancy, right? — Craig Federighi

The company built thread lockouts to kill romantic conversations before they could start — a feature designed to prevent users from mistaking a software layer for a companion. ^[1] At almost the same moment, OpenAI was designing a device it describes as a "humanlike AI companion" — a screenless, portable smart speaker for the home, expected in 2027. ^[2] Two companies are building the same physical object for the same release window. They have opposite ideas about what it should be to its user. This is not a contract dispute that spiraled. It is a territorial war over who owns the physical surface of consumer AI, and the legal filings that have piled up this month — Apple's trade-secret suit, OpenAI's breach-of-contract claim, Elon Musk's antitrust action — are its surface expression, not its substance. Apple's strategy is to make AI a software layer that flows through hardware it controls. The iOS 27 "Extensions" framework, announced in March, ends OpenAI's exclusive integration with Siri and lets users route queries to Google Gemini or Anthropic Claude through a settings panel. ^[3] Apple takes a commission on third-party AI subscriptions sold through a dedicated App Store section — a platform tax on the AI economy. The company has built a multi-year partnership with Google, worth roughly $1 billion a year, to base next-generation Siri foundation models on Gemini. ^[3][4] The new Siri Camera mode in iOS 27 runs on Google's model, not OpenAI's. ^[5] Tim Cook made the rationale plain.

Google’s AI technology would provide the most capable foundation — Tim Cook

OpenAI went from exclusive partner to one interchangeable option in a settings dropdown. For OpenAI, remaining a software layer inside Apple's ecosystem is an existential ceiling. The company has confidentially filed for an IPO targeting a valuation above $850 billion, and some reports put the target at $1 trillion. ^[6][7] A company that is merely a feature inside someone else's operating system cannot command that number. It needs to own the physical surface. So OpenAI is building one. The company has poached more than 40 Apple engineers, led by former Apple vice president Tang Tan, now OpenAI's chief hardware officer. ^[8] Apple issued out-of-cycle retention bonuses — $200,000 to $400,000 in restricted stock — to its iPhone Product Design team in March to stem the exodus. ^[9] OpenAI acquired io Products, the design firm co-founded by former Apple design chief Jony Ive, for $6.4 billion. ^[2] The target is a screenless, portable device for 2027 — the same year Apple plans to ship its own display-free AI smart glasses, developed after scrapping a lightweight Vision Pro headset. ^[10] The two devices occupy the same category: ambient computing worn or carried through the day, voice-driven, no screen. Apple is also developing a Siri pendant and camera-equipped AirPods. ^[9] OpenAI's GPT-Live voice models, launched last week, are explicitly positioned as "the primary interface to computing." ^[11] The software is being built for hardware that does not yet exist. OpenAI has also extended its reach into territory Apple has always controlled: the operating system. In April, the company updated Codex from a code generator into a desktop control tool that can view screens, interact with apps, and type inputs using its own cursor on macOS. ^[12] It consolidated ChatGPT, Codex, and its API into a single product team under Greg Brockman in May. ^[13]

We’re consolidating our product efforts to execute with maximum focus toward the agentic future, to win across both consumer and enterprise. — Greg Brockman

The pattern is not unique to Apple. OpenAI broke its cloud exclusivity agreement with Microsoft by launching models on Amazon Web Services in June, prompting Microsoft to evaluate legal action. ^[14][15] The same sequence — partnership, dependence, rupture — is playing out with the company's two most important allies. The lawsuits now piling up are best read as the surface of this territorial collision. Apple sued OpenAI on July 10, alleging systematic theft of hardware trade secrets: the complaint claims Tang Tan pressured recruits to bring Apple prototypes to interviews, and that ex-engineer Chang Liu exploited a security bug to download thousands of confidential files after his departure. ^[2] OpenAI denied the allegations. ^[2]

We have no interest in other companies’ trade secrets. We remain focused on building innovative technology that empowers people everywhere. — OpenAI

OpenAI, meanwhile, retained outside counsel to evaluate a breach-of-contract claim alleging Apple deliberately limited ChatGPT's visibility within Siri and iOS 18.2, causing subpar subscription growth. ^[8] Musk's xAI antitrust suit, filed in May, alleges the original Apple-OpenAI partnership included exclusivity provisions that hindered competing models on the App Store — provisions Apple has since abandoned by opening Siri to Google and Anthropic. ^[16] Sam Altman responded to Apple's suit by framing the conflict as direct hardware competition. ^[2]

the coolest piece of technology that the world will have ever seen — Sam Altman

The rupture is not yet settled, and it is not clean. OpenAI missed internal revenue targets this spring and a goal of 1 billion weekly active ChatGPT users; CFO Sarah Friar warned the company may struggle to fund its $600 billion in projected compute commitments. ^[17] A hardware bet of this scale, against Apple, with those financials, is a high-wire act. And in June, Judge Rita Lin dismissed xAI's trade-secret lawsuit against OpenAI with prejudice — a precedent that could weaken Apple's similar claims, though Apple's case includes additional allegations of file downloads via security bug exploitation. ^[6]

To hold otherwise would potentially expose employers to liability any time they inquire about a candidate’s past work. — Rita Lin

But the most telling detail may be the one that undercuts the clean narrative of war. In April 2026, OpenAI launched ChatGPT voice conversations via Apple CarPlay globally. ^[18] Three months later, the two companies were preparing to sue each other. Code was still flowing between them while the complaints were being drafted. The break is a gradual unraveling — two companies so entangled in each other's ecosystems that they cannot sever the connection even as they build competing futures on opposite sides of the same philosophical divide.