Apple sues OpenAI, alleging former employees stole hardware trade secrets

Apple has filed a lawsuit against OpenAI, alleging that former employees stole trade secrets related to hardware development for the ChatGPT platform, marking a significant escalation in tensions between the tech giants. The legal action, filed in a California federal court, accuses OpenAI of encouraging Apple employees it recruited to share confidential information, including guiding them on how to avoid scrutiny when transitioning to the AI company.

Apple’s Legal Claims Against OpenAI

The lawsuit states that OpenAI’s nascent hardware business “rests on the shakiest of foundations, rotten to its core by its illegal reliance on misappropriated trade secrets.” Apple claims that two former employees, Tang Tan and Chang Liu, accessed confidential information while working at OpenAI. Tan, now OpenAI’s chief hardware officer, previously contributed to the design of Apple products like the iPhone and Apple Watch. Liu, a former electrical engineer, was entrusted with sensitive product development tasks before joining OpenAI earlier this year.

Apple alleges that Liu downloaded confidential hardware-related files from an Apple-issued device after leaving the company. The lawsuit also claims that Tan directed job candidates still employed by Apple to bring “Actual parts” from Apple to their interviews at OpenAI. Apple said it uncovered a “pattern of theft” during an investigation and reached out to OpenAI in February to raise concerns, but the company did not respond.

OpenAI’s Response and Broader Context

OpenAI has not denied the allegations but stated it is “still reviewing the filing.” A spokesperson, Drew Pusateri, said the company has “no interest in other companies’ trade secrets” and emphasized its focus on “building innovative technology that empowers people everywhere.” The lawsuit names OpenAI’s hardware project as a central point of contention, with Apple asserting that the effort was built “partly on knowledge stolen from Apple.”

The legal battle follows a shift in the relationship between Apple and OpenAI. The companies initially partnered in 2024 to integrate ChatGPT as an AI-powered “answer engine” on the iPhone. However, the partnership has since turned contentious, with OpenAI expanding into hardware development. The lawsuit also implicates io Products, the company acquired by OpenAI in a $6.5 billion deal last year. Io Products was co-founded by Tan and Jony Ive, the former Apple designer now overseeing OpenAI’s hardware project.

Legal and Business Implications

The lawsuit comes as OpenAI faces pressure to go public and compete with rivals like Anthropic and Google. OpenAI’s chief financial officer, Sarah Friar, recently stated that the company plans to release consumer hardware “towards the end of this year.” However, the legal challenges could complicate its growth. Apple’s case also overlaps with a separate lawsuit from iyO Inc., a tech startup that accused Tan of trade secret theft and alleged trademark infringement against OpenAI and Ive.

Apple’s legal team has sought to frame the case as a defense of its innovations, with a spokesperson stating the company will “always defend our teams’ hard work and innovations.” The lawsuit names both OpenAI and io Products as defendants, though lawyers for the latter have directed inquiries to OpenAI for comment.

Timeline of Key Events

The conflict between Apple and OpenAI began with their 2024 partnership, which aimed to leverage ChatGPT’s capabilities to enhance Apple’s AI offerings. By 2026, the relationship had deteriorated as OpenAI pursued independent hardware development. The lawsuit was filed on July 11, 2026, following Apple’s investigation into potential leaks of trade secrets. OpenAI’s acquisition of io Products in 2025 and its recruitment of former Apple employees, including Tan and Liu, are central to the allegations.

The case also highlights broader tensions in the tech industry over intellectual property and competition. As AI hardware development accelerates, disputes over proprietary knowledge are likely to intensify. Apple’s legal strategy appears to target both OpenAI’s business practices and its reliance on former employees, while OpenAI seeks to position itself as a neutral innovator.

The outcome of the lawsuit could set a precedent for how tech companies handle trade secrets in the AI era. For now, the case underscores the high stakes of hardware innovation and the legal risks associated with talent poaching in the sector.