Apple Sues OpenAI, Alleging Systematic Theft of Trade Secrets to Build Rival Hardware

Apple filed its complaint in the U.S. District Court for the Northern District of California, accusing OpenAI of running a theft operation reaching the highest levels of its hardware division.

“At every level, from members of its Technical Staff to its Chief Hardware Officer, and in coordination with business partners, OpenAI has been stealing Apple’s trade secrets and confidential information,” the 41-page filing states, according to CNBC.

The lawsuit names OpenAI, its hardware subsidiary io Products, and two defendants: Tang Tan, OpenAI’s chief hardware officer and a former Apple executive who led iPhone and Apple Watch product design, and Chang Liu, a former Apple senior systems electrical engineer who joined OpenAI in January. 

What Apple Says Tan and Liu Actually Did

According to the complaint, Tan used confidential Apple project code names during OpenAI’s recruiting process and directed Apple employees interviewing at OpenAI to bring “actual parts” from Apple products to interviews for what the filing calls “show and tell” sessions. 

Apple also alleges Tan possessed and circulated an internal Apple document detailing the company’s departure security protocols, distributing it to new OpenAI hires before they had even resigned. 

Liu is separately accused of failing to return an Apple-issued laptop and exploiting a security flaw to access a former colleague’s Apple work computer, ultimately downloading more than 1,000 pages of confidential engineering files, including circuit board manufacturing documents. 

TechCrunch reported that Apple first raised these concerns directly with OpenAI in a letter sent in February, but the company never responded, prompting Apple to pursue the case through the courts instead.

However, OpenAI, for its part, has been reported to be preparing its own legal action against Apple over revenue-related terms.

Allegations That the Theft Already Shaped OpenAI’s Products

Beyond the recruiting-related claims, Apple alleges the stolen information has already influenced OpenAI’s physical hardware. 

The complaint alleges OpenAI misled a trusted Apple manufacturing partner into performing one of Apple’s proprietary metal-finishing techniques by claiming Apple had authorized the work. 

It also alleges OpenAI approached a second longtime Apple supplier, using insider terminology to obtain details about specific power and battery components. 

“OpenAI’s nascent hardware business now rests on the shakiest of foundations, rotten to its core by its illegal reliance on misappropriated trade secrets,” Apple’s filing states, according to 9to5Mac. 

Apple is seeking injunctive relief, monetary damages, and a court order requiring OpenAI to return any confidential materials still in its possession.

For OpenAI, the hardware dispute adds to mounting U.S. legal challenges over regulatory concerns. For Apple, the alleged espionage adds to security concerns after the Tata Electronics breach that exposed iPhone 18 Pro data.

A Partnership That Fully Unraveled

The lawsuit marks a dramatic reversal for two companies that partnered in 2024 to integrate ChatGPT into Siri and Apple Intelligence. 

Since then, the relationship has cooled: Apple’s revamped Siri, launching this fall, will use Google’s Gemini models instead of OpenAI’s technology. 

OpenAI told CNN it has “no interest in other companies’ trade secrets” and remains “focused on building innovative technology that empowers people everywhere.” 

Jony Ive, Apple’s former chief design officer, whose startup io was acquired by OpenAI for $6.5 billion last year and who now leads its hardware efforts, is not named as a defendant or accused of wrongdoing. 

The suit comes as OpenAI prepares for a widely anticipated IPO, faces growing competition from Anthropic and Google, adding fresh legal uncertainty just as the company works to bring its first consumer hardware device.

Source: Apple sues OpenAI, two former employees for trade secrets theft