Apple sued OpenAI in federal court in Northern California, alleging that former Apple employees now working at the AI company stole trade secrets to help build OpenAI’s first consumer hardware device.
The complaint names OpenAI, its hardware startup io Products, and two individuals: Tang Tan, OpenAI’s chief hardware officer who previously led iPhone and Apple Watch product design, and Chang Liu, a former Apple electrical engineer who joined OpenAI in January.
Apple frames the case bluntly, arguing that “at every level,” from technical staff to its chief hardware officer, OpenAI has been taking Apple’s confidential information. These are allegations in a filing, not proven facts, and OpenAI has denied them, saying it has “no interest in other companies’ trade secrets.”
The specific accusations are unusually detailed. Apple alleges Tan used internal Apple codenames to press job candidates still employed at Apple for information, and directed them to bring “actual parts” such as batteries and logic boards to interviews for “show and tell” sessions. It claims he circulated an Apple offboarding document that taught new OpenAI hires how to evade the company’s exit-security checks, and that he emailed himself details about Apple suppliers before leaving.
Separately, Apple accuses Liu of failing to return a work laptop, exploiting a security bug to download more than a thousand pages of technical files including circuit-board manufacturing documents, and coaching another recruit on what confidential material to study. Apple also alleges OpenAI misled a trusted Apple supplier into performing a proprietary metal-finishing technique without authorization. The company calls this “the tip of the iceberg” and is seeking an injunction, damages and the return of its materials.
Notably, Jony Ive, Apple’s former design chief who now leads OpenAI’s hardware work and co-founded io with Tan, is not named as a defendant or accused of wrongdoing. OpenAI acquired io last year in a deal valued around $6.5 billion, and CEO Sam Altman has said its first prototypes are complete, with the device expected to be unveiled later this year. Apple noted that more than 400 former Apple employees now work at OpenAI.
Why the Case Cuts Deep
The lawsuit marks a striking reversal for two companies that partnered in 2024 to put ChatGPT inside the iPhone. That relationship has since frayed; Apple’s revamped Siri this fall will run on Google’s Gemini, not OpenAI’s technology, and Bloomberg reported in May that OpenAI itself was weighing legal action against Apple over the Siri deal, which Apple says is not at issue here.
The suit strikes at the core of OpenAI’s hardware ambitions precisely as it tries to move beyond software and control its own device, and Apple argues that business now “rests on the shakiest of foundations.” The dispute also captures a defining feature of the AI era: as model providers push up the stack into devices, and as talent flows between rivals, a company’s most valuable, most portable asset, the knowledge inside its employees, becomes the hardest thing to protect.
The Stakes for OpenAI
The timing is awkward for OpenAI, which is preparing for a historic IPO and can ill afford legal clouds over a flagship product. Trade secret cases are hard to prove, hinging on whether specific protected information was actually taken and used rather than on ordinary knowledge employees carry between jobs, so the outcome is far from certain. But even an unresolved suit can slow a launch, deter suppliers and complicate investor confidence.
The case adds to OpenAI’s mounting legal load, following copyright suits and a recent trial victory over Elon Musk, and it raises a broader question for the industry about where legitimate hiring ends and misappropriation begins. For Apple, famously protective of its secrecy, the suit is also a warning shot to any rival tempted to build a hardware business on the backs of its departing engineers.
