Apple recently filed a trade secret lawsuit against OpenAI, accusing the artificial intelligence company of a pattern of misconduct aimed at getting current and former Apple employees to share confidential information. (In response, OpenAI said it is “not aware of any evidence that this complaint has merit.”)

On the latest episode of TechCrunch’s Equity podcast, Kirsten Korosec, Sean O’Kane and I debate whether this lawsuit will overshadow OpenAI’s much-discussed plans to enter the hardware business (starting with a mobile smart speaker) and go public.

“Even setting aside whether or not the court grants any kind of injunctive relief or any kind of restraining order on what OpenAI is doing, it can naturally lead to that kind of situation where it will cause some delays in what OpenAI is working on,” Sean suggested. “Which I’m sure was probably part of the reasoning behind Apple doing this. They don’t do these things anyway.”

With all those plans in play, will OpenAI try to resolve this as quickly as possible, or has it learned from its recent court victory against Elon Musk that it can bear the cost and embarrassment of a trial? Kirsten, at least, predicts the latter.

Read on for a preview of our conversation, edited for length and clarity.

Kirsten Korosec: Sean, how about Sam Altman listening to you with a small device maybe in your pocket?

Sean O’Kane: I’m fine. Maybe that’s predictable, but I’m fine. No, thanks.

I’m sure we’ll get into it, but this is supposedly the first product OpenAI has been working on in its hardware division with Jony Ive and company. They’ve been very coy since that weird video they posted last year where they were sitting in that coffee shop or bar in San Francisco and talking very vaguely about legacy hardware and devices, i.e. laptops and phones. And if this is the direction they’re headed, all the power to the people who want to have someone like that always listening to them. This won’t be for me.

Antonio Ha: Part of what we need to remember about those types of devices is also that, depending on how mobile it is, it’s not just about listening to you, it’s about listening to the people around you. I might be okay with that, I’m not okay with that, but let’s say yes, but if we meet in person at Disrupt, suddenly he might be listening to all of us.

There are all kinds of social norms that will have to be renegotiated if these things become widespread. I think we should mock and criticize people who record other people without their consent.

Kirsten: Well, I mention the device that’s been speculated about for a long time, and we’ll see what it actually ends up being once it’s officially unveiled, but it’s important in the context of this lawsuit that Apple filed last Friday.

Without a doubt, it was the most important news of the week, and it is a lawsuit for trade secrets. You have some pretty wild allegations and we must really emphasize that these are allegations that have been raised in a complaint by Apple. But what it accuses OpenAI of is a pattern of misconduct at the highest levels, specifically targeting OpenAI employees who used to work at Apple. And in fact, they named hardware director Tang Tan in this lawsuit.

This is all important because Apple is accusing OpenAI of essentially stealing its trade secrets, but in the context of that, this could be used for a competing hardware product. I’m wondering if maybe we won’t get into whether this lawsuit has merit, because we haven’t gone through full discovery, but what are your initial impressions of the lawsuit other than the fact that wow, this is going to be entertaining?

be: Two things. First, this is a pretty big potential risk for whatever OpenAI is working on. Even setting aside whether or not the court grants some kind of injunctive relief or some kind of restraining order on what OpenAI is doing, it can naturally lead to that kind of situation where it will cause some delays in what OpenAI is working on, which I’m sure was probably part of the reasoning behind Apple doing this. They don’t do these things whether we want them to or not.

The other is that we believe OpenAI is; We know that they have confidentially filed for an initial public offering. We think it could happen late this year, or early next year, considering Sam Altman’s cautious language around the IPO. And this just raises a lot of questions about it because, on the one hand, we think your business right now is probably overwhelmingly software; In reality, at the moment they are not considering any hardware business in that scenario.

They’re about to go to the markets and they’re going to pitch to bankers and investors where they think their addressable market should be, and if they have a lot of that tied to a potential hardware and hardware products split, this could be a big risk and changes a lot of the calculus of how the IPO is priced. So that’s where my head is at.

Antonio: One [allegation] I guess Apple must have pretty solid numbers, they said over 400 Apple employees now work on OpenAI. It is true that both are very large companies with many thousands or tens of thousands of employees. So as a percentage, it’s not necessarily huge. But that seems like a lot of people and a pretty serious talent drain.

And the other thing I’m wondering is related to Sean’s point. In the context of the potential IPO, how much damage has OpenAI ultimately suffered from a marketing and branding perspective from the ordeal it has already gone through? Which basically seemed to win, but there was a lot of not-terrible-but-embarrassing dirty laundry that came out in the testimony. To what extent do they say, “We don’t want to go through that again”? Or did they learn the lesson of, “Hey, we went through this and we survived and we’ll be fine if we have to do another test with Apple”?

Kirsten: By the way, I completely predict the latter.