Apple Sues OpenAI, Alleging a Trade Secret Pipeline Running "At Every Level"

Apple filed a lawsuit against OpenAI on Friday in the U.S. District Court for the Northern District of California, accusing the company of stealing trade secrets to build its first consumer hardware device, according to CNBC. The complaint claims the theft happened "at every level" of OpenAI, from rank-and-file technical staff up to its chief hardware officer.

The suit names OpenAI, its hardware subsidiary io Products, and two former Apple employees. Tang Tan is a former Apple vice president who led product design for the iPhone and Apple Watch and now runs hardware at OpenAI. Chang Liu spent eight years at Apple as a senior systems electrical engineer before joining OpenAI in January, per CNN.

The allegations

Apple claims Tan used his knowledge of confidential Apple projects, including internal codenames, to pull information out of job candidates during interviews. Candidates who were still working at Apple were allegedly told to bring physical components such as batteries and logic boards to their interviews for "show and tell" sessions. 9to5Mac reports that in one case, a candidate began screenshotting and downloading files tied to a confidential Apple project hours before an interview with Tan, who then asked about that same project once the interview started. Apple describes this as an established pattern.

The complaint also says OpenAI coached departing employees on how to get around Apple's exit security procedures. Tan allegedly kept or obtained an internal Apple managers' document marked "Need to Know" that lays out those procedures, and shared it with new OpenAI hires before they resigned. MacRumors reports he also told recruits not to reveal they had accepted OpenAI jobs so they could stay inside Apple longer.

Liu is accused of failing to return a company laptop after leaving, then using it to download dozens of confidential files covering unreleased products, engineering presentations, and technical specifications. The suit says he also got into a former colleague's work computer after his departure and advised at least one Apple employee on what to study before an OpenAI interview, per TechCrunch.

The alleged misconduct reaches into Apple's supply chain too. Axios reports that one of Apple's manufacturing partners showed OpenAI a proprietary metal finishing technique after being misled into thinking Apple had signed off on the disclosure.

Apple says it sent OpenAI a letter about all of this in February and never heard back. It is asking the court for damages, the return of its confidential materials, and an injunction blocking OpenAI from using or disclosing its trade secrets.

What this means for OpenAI's hardware plans

The timing is bad for OpenAI. The company bought Jony Ive's hardware startup io Products last year in a deal worth about $6.4 billion, and its first device has been expected to launch in 2026. Reports have described it as anything from a smart speaker to a screen-free gadget that is aware of its surroundings. An injunction, or even a long discovery process digging into where its hardware designs came from, could push that timeline back. CNN notes the suit could also complicate OpenAI's plans for a heavily anticipated IPO.

Ive is not named as a defendant. Sam Altman is mentioned in the filing but not accused of anything, and Apple does not suggest either man was directly involved. Apple also is not going after OpenAI's recruiting itself, though the complaint points out that more than 400 former Apple employees now work at OpenAI.

A partnership gone sour

Two years ago these companies were on stage together. Apple and OpenAI announced a deal in 2024 to integrate ChatGPT into the iPhone, and Altman visited Apple headquarters for the announcement. The filing states that agreement is not at issue in this case, but the relationship has clearly deteriorated. Bloomberg reported in May that OpenAI was weighing its own legal action against Apple, claiming the ChatGPT integration was never promoted or built out the way Apple promised. And Apple's revamped Siri, due this fall, will reportedly run on Google's Gemini models rather than OpenAI's technology, per CNBC.

In a statement, Apple said it takes protecting its teams' work and intellectual property seriously, and that significant evidence had surfaced of OpenAI employees wrongfully taking confidential information about unreleased technologies. OpenAI has not commented on the suit.

The bigger fight here is over talent. AI labs and the big device makers are hiring from the same pool of engineers, and the question of where legitimate expertise ends and stolen secrets begin is now headed to federal court. Discovery in this case may end up revealing more about how OpenAI's hardware operation actually works than any product launch would.