Apple Sues OpenAI, Alleging the AI Company Stole Trade Secrets

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0:33We have new reporting on worries that the new Air Force One lacks defensive capabilities. Plus, President Trump says he won't sign a landmark bipartisan housing bill. And Hollywood is minting new millionaires as it turns to YouTube for the next horror hit. It's actually very hard to make money from a viral creation online. It kind of escapes your control. It's Friday, July 10th. I'm Alex Osela for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today.

1:10We start today's show with a lawsuit between two tech giants. Apple has sued OpenAI and one of its top executives, alleging the AI company stole trade secrets. The civil suit accuses OpenAI of taking Apple's confidential information as part of its effort to develop competing devices. Two OpenAI staffers named in the suit, OpenAI's chief hardware officer and a member of its technical staff, are former Apple employees. OpenAI did not immediately respond to a request for comment. The Wall Street Journal's parent company, News Corp., has a content deal with OpenAI. More Americans are testing positive for marijuana in workplace drug tests.

1:46Quest Diagnostics ran around 8 million of those drug tests last year, and about 4.4 % of them came back positive. That's up from 3.9 % in 2021. More states and cities in the U.S. have legalized marijuana, which means a positive test isn't as big a deal to employers. It can still matter for some jobs, like trucking or construction, but these days more employers say marijuana is like alcohol. It's fine if you're doing it off the clock. In fact, an employment lawyer says some jobs have stopped screening applicants for marijuana altogether because it would be harder for them to find qualified candidates.

2:22In China, a fire at a shoe factory in the southeastern part of the country killed at least 28 people yesterday. It's the latest in a string of fatal industrial accidents. An explosion in a coal mine in May killed more than 80 people, while a blast at a fireworks factory in central China claimed 37 lives. Experts say China's factory conditions have improved over the years, but it's still a huge problem, with more than 18 ,000 deaths from workplace accidents last year. Separately, Chinese state media said today that the country had launched and crucially partially recovered a space rocket. It was the first time China has successfully displayed its rocket recovery technology.

2:59WSJ China economics reporter Katrina Northrup says it's an important milestone as Beijing seeks to transform itself into a space power and to compete with the U.S. China has been investing a huge amount into space and encouraging their private space companies to do more satellite launches. And this shows that China is rapidly catching up to the U.S. Recovering a rocket is important because it makes satellite launches a lot cheaper. If you can recover part of the material, then you can reuse it in the next launch. SpaceX has been doing this for more than a decade, and that's really enabled them to do many, many launches at a cheaper cost.

3:45China hasn't been able to do that until today, and so there is still a real gap between the two countries. We have three updates from the aviation industry. Delta says revenue in the second quarter rose 19 percent, and CEO Ed Bastian said travel demand is strong, even with airfares rising. In an interview on CNBC today, he added that ticket prices haven't risen as much as overall inflation, and that airfare is a, quote, tremendous bargain. If you look at post-COVID, airfares for the industry are 10 to 15 percent lower than what average CPI has been. So if people are having concerns with respect to airfares, they have much higher concerns with respect to other products, which maybe is a reason why the demand continues to stay strong for us.

4:31Overall profit fell by about a quarter, however, to$1.6 billion. The rising cost of fuel and other items outpaced the revenue jump. The company's sticking to its previous guidance for the full year. There may be a bidding war in store for budget airline EasyJet, one of Europe's biggest carriers. EasyJet said today that it's agreed to a potential$7.6 billion takeover by U.S. asset manager Apollo. But just on Monday, EasyJet said that it agreed in principle to a more than$7 billion takeover by another U.S. investor firm, Castle Lake. Apollo has until August 7th to make a formal offer or walk away.

5:08Castle Lake says it's considering its options. EasyJet's stock today rose 14 percent in London. Another European airline, Ryanair, made an emergency landing shortly after takeoff in Greece today. A window from the plane dislodged during the flight and a passenger's head was pulled through the opening. Greek media reports that the passenger was a 61-year-old Serbian man. His wife held onto his legs, and she and other passengers were able to pull him back inside the cabin. A U.S. regulator, the National Transportation Safety Board, says the plane turned back to the airport after a right engine issue and the cabin decompressing.

5:43A person briefed on preliminary details says that an engine failure appeared to cause debris to hit the side of the plane. That rapidly depressurized the cabin, and the window was jolted out. Ryanair says emergency responders met the passenger who survived. Boeing, the planemaker, says it's been in contact with Ryanair. Coming up, there's an early sign that sluggish home sales could heat up this summer. That's after the break.

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6:41The Wall Street Journal has learned that President Trump flew an older Air Force One plane home from the NATO summit in Turkey this week because his new luxury Air Force One lacked defensive capabilities. U.S. officials said the Israeli intelligence about a possible Iranian plot to kill Trump factored into that decision, even though the threat wasn't deemed entirely credible. The Secret Service, the White House's military office, and some national security staff determined that Trump's new plane, a gift from the Qatari government, wasn't adequate to fly the president home. Trump has denied that a security concern prompted the decision to switch planes.

7:14White House Communications Director Stephen Chung says the luxury plane has high-level security protocols. The precise defensive capabilities of Air Force One are classified. President Trump said today that he wouldn't sign a landmark housing bill because Congress hasn't taken action on his voter ID proposal. The bill is bipartisan, and it aims to make housing more available and affordable. The White House didn't say whether Trump planned to veto the legislation. If he does nothing, it will become law automatically this weekend. The What's News team recently did a series on housing, and one of our episodes focused on the housing bill.

7:46We'll leave a link to it in our show notes. And despite the disappointing numbers for the spring home selling season, summer is already looking more promising. Mortgage technology and data company Optimal Blue says a lot more people locked in mortgage rates in June. This is a good sign for home sales in the next few months because buyers typically lock in their mortgage rates after they agree to make a purchase and before they close. While economists aren't expecting a housing boom, even a few months of higher sales would be good news for the sluggish market.

8:18South Korean chipmaker SK Hynix popped in its U.S. market debut today, the largest ever U.S. share sale by a foreign company. Shares closed 13 percent higher. U.S. indexes overall ended the day higher, with the S &P leading the gains, adding 0.4 percent. For the week, the S &P 500 and the Nasdaq were both up more than 1 percent, while the Dow lost half a percent.

8:43Horror movies from young YouTube creators, movies like Backrooms and Obsession, have been surprise box office winners in recent months. Now, Hollywood is combing through YouTube and Reddit for the next big horror hit. Journal entertainment reporter Ben Fritz is here to discuss. Ben, what kinds of digital properties are studios trying to snag? They're really interested in horror. Horror is clearly the genre that's working with young people and is big online. so they're trying to find properties that already have a big following on reddit on roblox on youtube on tiktok etc there was a recent deal for a creature called siren head which is i really recommend people just look it up online it's a very bizarre interesting creature it's like a giant monster like it's made out of utility poles for its head it is two big sirens i don't know how like a Bigfoot for Gen Z.

9:36This Canadian illustrator named Trevor Henderson created it in 2018. It sort of went nowhere for the first couple of years, and then it became a video game, and people started playing the game on YouTube, and it went viral. You can find it all over every digital platform you can think of to search for Siren Head, and there is content. And how big of a deal was it for a studio to acquire the rights to Siren Head? It's a huge deal. Hollywood for a long time has looked for stuff to adapt in books, in comic books, in toys, in games. We've never really looked to these new digital social platforms. And now it's becoming a huge new source of IP thanks to the success of Backrooms in particular.

10:16And for the digital creators like Trevor Henderson, I mean, it's life-changing. It's actually very hard to make money from a viral creation online. It kind of escaped your control. So Trevor told me, even though Siren Head is so big and you can find knockoff merchandise on Amazon and games on Roblox and whatever, he's never made a penny from it until this movie deal. And how much was the movie deal? Just for the movie rights, he got more than$1 million. Part of the deal, he held on to some of those rights for himself. He can still sell merchandise, make games, etc. You know, he's, as they say, going from zero to hero very quickly.

10:48So deals like these present obvious benefits for creators, and I could see the appeal for Hollywood as well. But does it present risks for these big movie studios? Yeah. I mean, Hollywood has a long history of finding a trend, like diving in full bore and then overdoing it. And we all remember when it seemed like there was a new superhero movie every week. And then when they overdo it and the quality starts to dip and people get sick of it. So there is absolutely a danger of that happening with digital horror. We're talking a lot about horror, which seems to be really resonating with younger audiences.

11:21But is there a possibility that this interest from movie studios could expand into other genres? People are hopeful. There's obviously all sorts of content online. I think people are particularly talking about comedy. The big screen comedy also has been on life support for a while and people would love to see more comedy succeed at the box office. And there's lots of good comedy on YouTube and TikTok and Instagram, for example. Nobody's cracked that nut yet. But there's definitely some hope that they'll be able to use this formula for a comedy as well. That was WSJ Entertainment reporter Ben Fritz.

11:52And that's What's News for this week. Tomorrow, you can look out for our weekly markets wrap-up, What's News in Markets. Then on Sunday, we'll be discussing the growing number of efforts across the U.S. to tax states' wealthiest residents. That's in What's News Sunday. And we'll be back with our regular show on Monday morning. Today's show was produced by Danny Lewis and Anthony Bansi with supervising producer Tali Arbel. Michael LaValle wrote our theme music. Aisha El-Muslim is our development producer. Chris Zinsley is our deputy editor. and I'm Alex Osala. Have a great weekend and thanks for listening.

12:32Hey, this is Telus Demos. And I'm Miriam Gottfried. We're reporters at The Wall Street Journal and the hosts of WSJ's Take on the Week. It's a weekly show that gives listeners a leg up in the world of markets and investing. From the Fed's moves to market bubbles, we dive into the biggest deals, key players and business news ahead. If you're looking for more news and tools that you can use to help navigate the markets, consider becoming a subscriber to The Wall Street Journal. Visit subscribe.wsj.com slash take on the week to subscribe now.