Apple Sues OpenAI for Alleged Theft of Trade Secrets

On July 10, Apple Inc. filed a lawsuit against OpenAI in the U.S. District Court for the Northern District of California, accusing the AI company of systematically stealing trade secrets to help develop its own consumer AI hardware products. The 40-page complaint names OpenAI, its hardware subsidiary io Products (which it acquired), and two former Apple employees – Tang Tan, now OpenAI’s Chief Hardware Officer, and Chang Liu, a former senior electrical engineer at Apple.

In its filing, Apple alleges that OpenAI has poached over 400 former Apple employees, spanning key areas such as product design, displays, antennas, supply chain, and procurement. A central figure, Tang Tan, had worked at Apple for more than 25 years and served as Vice President of Product Design, leading the design of iconic products like the iPhone, Apple Watch, and AirPods. Apple accuses Tan of actively recruiting Apple staff and even instructing candidates to bring physical components from Apple to interviews as part of a “show-and-tell” session.

The other defendant, Chang Liu, is accused of keeping an Apple-issued laptop after leaving the company in January 2026 and using a system vulnerability to continuously access Apple’s internal file servers. The complaint includes a chat log where Liu messaged a former colleague after his departure: “LOL, I found I can still access the network drive,” before downloading dozens of confidential files, including over 1,000 pages of technical documents and circuit board manufacturing details. Apple further claims that OpenAI approached its suppliers for information and misled partners into adopting a metal surface treatment technology developed by Apple.

Apple stated: “Overwhelming evidence shows that relevant employees of OpenAI unlawfully stole Apple’s confidential information about unreleased technologies, processes, and products. We will always defend the fruits of our teams’ hard work and innovation.” The company is seeking a court injunction to bar OpenAI from using the stolen trade secrets and is also demanding monetary damages.

OpenAI denied all allegations, emphasizing that it has “no interest in other companies’ trade secrets.” The lawsuit marks a complete breakdown in relations between the two companies – in 2024, Apple had partnered with OpenAI to integrate ChatGPT into the iPhone. However, tensions escalated after OpenAI acquired io Products – a hardware firm founded by former Apple design chief Jony Ive – for about $6.5 billion last year. Legal experts suggest that if the court finds OpenAI guilty of using ex-Apple employees to misappropriate secrets, its hardware development could face significant delays, adding further uncertainty to the company’s planned IPO.