It’s one feud after another for OpenAI.

Fresh from its court battle with co-founder Elon Musk this spring, Sam Altman’s artificial intelligence company has now found itself in the legal crosshairs of another tech titan. Apple is accusing the ChatGPT developer of stealing trade secrets and hardware designs to bolster its development of an AI-fueled smartphone that would challenge the iconic iPhone.

A Personnel Matter

To say the two companies have a troubled history is an understatement. In 2024, the pair teamed to integrate ChatGPT into Siri and other iPhone features, a partnership that would allow Apple to AI-ify its devices without the massive capex needed to develop its own models while helping OpenAI reach the countless users in the Apple ecosystem. In January, however, Apple announced it would begin integrating Google’s Gemini AI model into iPhones in a multibillion-dollar deal that appeared to supplant ChatGPT as Apple’s AI model of choice. Months later, in May, Bloomberg reported that Apple plans to soon let users choose non-ChatGPT models to power Siri, including models from Google and OpenAI’s archrival Anthropic.

Also in May, Bloomberg reported that OpenAI was considering legal action against Apple after the 2024 Siri deal proved less exclusive (and, crucially, less lucrative) than expected. But now Apple has beaten Sam Altman to the punch with a lawsuit touching not just on hardware but personnel:

• OpenAI revved up its smartphone ambitions last year after acquiring Io Products, a tech design startup founded by longtime Apple design chief Jony Ive that also employed several other high-profile Apple veterans. OpenAI now employs more than 400 former Apple employees, the lawsuit claims.
• Many of those former employees, Apple alleges, have brought with them trade secrets about Apple hardware designs and confidential information about key Apple suppliers. Worse, Apple alleges, OpenAI advised outgoing Apple employees on how to evade the notoriously secretive company’s security procedures. One key Apple employee poached by OpenAI exploited a “vulnerability” in its digital storage system to steal confidential files after leaving, the lawsuit claims.

Slow Your Scroll: In sum, Apple is accusing the company of systematic intellectual property theft, a claim that could upend OpenAI’s plans for a smartphone killer if Apple proves trade secrets were used in its design. Nonetheless, one source told Bloomberg on Monday that OpenAI still thinks it’s on track to announce its first device this year and launch it sometime next year, a crucial step as it considers delaying its IPO until 2027.

VfL Wolfsburg, the German soccer team that operates as a wholly owned subsidiary of carmaker Volkswagen, was relegated from the Bundesliga in May for the first time since being promoted to the country’s top-flight competition in 1997. It’s hard not to see the squad’s floundering performance as a tribute to its corporate parent.

On Monday, CEO Oliver Blume told staff that struggling VW could double existing plans to axe 50,000 jobs. The resulting 100,000 cuts would make for one of the most extraordinary downsizings in corporate history, underscoring the dire nature of the once-mighty carmaker’s quandary.

Desperate Zeiten, Desperate Measures

First, there’s China, VW’s biggest market. The company has been undercut there by the emergence of government-backed, domestic brands like BYD, which produce cheap, high-tech electric vehicles. In the second quarter, VW sold 2.1 million vehicles globally, an 8.6% year-over-year decline fueled by a 36% drop in Chinese sales.

Then there’s the problem of building at home. Germany’s auto sector was once an industrial powerhouse, but now it’s a really expensive endeavor, thanks to high wages and higher energy bills. Blume, in his memo, estimated VW has a roughly 20% cost disadvantage relative to peers. The company is also much less efficient: With a payroll of 680,000 workers, VW built about 9 million vehicles last year. Toyota, whose workforce of 390,000 is about 57% of VW’s, nonetheless built 2 million more cars.

Lastly, there’s the 25% US tariff on auto imports, which Blume estimates may slice $5.9 billion a year from VW’s operating profit. In fact, VW’s net profit fell 44% to $8 billion last year. With shares down more than 30% this year, something has to be done:

• Last year, VW pledged “massive” investments in the US, where its production sites include a sprawling Tennessee plant, in an effort to get around tariffs. VW has increased investments in robotics and automation.
• Blume said he can’t guarantee the continued operation of four German plants but would prefer finding an “intelligent solution” (like partnering with the defense industry) to closing them.

Cataloging Failures: A 100,000-worker layoff would not only be an automotive industry record but also top some of the largest corporate cutbacks in history. Citigroup axed nearly 75,000 roles during the 2008 financial crisis. General Motors parted with 47,000 staff in 2009, the year it declared bankruptcy, and department store chain Sears laid off 50,000 in 1993 when it closed more than 100 stores and discontinued its famous catalog.

De Beers is shutting down South Africa’s biggest diamond mine for two years as it takes a sledgehammer to costs. The Venetia mine churns out 40% of South Africa’s diamonds and 10% of those used by De Beers.

The diamond giant hasn’t cut its output expectations, instead planning to save on its stones by moving mining elsewhere. De Beers said Monday it has managed to lop off $100 million of annual overhead costs since 2024.

The $80 billion diamond industry has been going through rough times, and De Beers parent Anglo American slashed the value of its diamond business in half this February. It was Anglo American’s third writedown in as many years as the mining giant actively seeks to move away from diamonds and instead double down on materials like copper.

Not All Diamonds Are Forever

De Beers is credited with popularizing diamond engagement rings in the 20th century, using savvy marketing that convinced generations of brides that “A diamond is forever.” But the business has changed significantly since then, particularly in the past decade:

• Lab-made diamonds made up less than 1% of diamond sales globally 10 years ago but now account for more than a fifth. While rivals like Signet have added more lab-grown stones to their lineups to lift sales, De Beers has stuck to mined gems. The diamond giant last year wound down Lightbox, its venture into synthetic stones.
• Lab-made diamonds are significantly cheaper than their mined counterparts, and their prices have only fallen as companies compete to churn out larger, higher-clarity stones. Putting more pressure on the industry to slash prices, the postpandemic slump in Chinese luxury spending has sapped sales while conflicts in the Middle East have disrupted the diamond trade.

Losing Sparkle: This month, Bloomberg reported that De Beers cut its prices to bring them much closer to the market rate, signaling that it’s giving up on maintaining its premium position. One way to retain the value of mined diamonds might be abandoning the carat-for-carat competition with lab-made rivals that give buyers more bling for their buck. Demand could rise for diamonds with unique traits that aren’t being replicated in the lab (yet).