Apple Sues OpenAI, Alleging Trade-Secret Theft to Build AI Hardware
The tl;dr
Apple has sued OpenAI in federal court in Northern California, alleging trade-secret theft and breach of contract by former Apple employees who jumped to the AI lab and, it says, took confidential designs to help build consumer hardware that would rival the iPhone. The complaint names OpenAI's hardware chief Tang Tan, a former Apple product-design VP behind the iPhone and Apple Watch, and Chang Liu, an ex-Apple engineer who allegedly kept his company laptop and downloaded more than 1,000 pages of confidential files. It is a striking reversal for two firms that partnered in 2024 to put ChatGPT inside Apple Intelligence, and it lands as OpenAI pushes into hardware built around the io startup co-founded by Jony Ive that it bought for about $6.5 billion.
Key points
- Apple filed suit on Friday in the US District Court for the Northern District of California, alleging trade-secret theft and breach of contract, saying former staff took confidential information to benefit OpenAI's hardware push.
- The complaint names Tang Tan, OpenAI's hardware chief who previously led iPhone and Apple Watch product design at Apple, and Chang Liu, a senior electrical engineer who spent eight years at Apple before leaving for OpenAI.
- Liu allegedly failed to return his Apple laptop and exploited a security bug to download more than 1,000 pages of confidential engineering files on unannounced products; Tan allegedly used internal Apple codenames in recruiting and asked candidates to bring actual Apple parts to 'show and tell' interviews.
- Apple says the conduct was a pattern directed by OpenAI's leadership; OpenAI had not responded publicly at the time of filing. Apple's complaint frames it plainly: the case 'is about Apple's former employees stealing Apple's trade secrets for the benefit of OpenAI.'
- The backdrop is OpenAI's hardware ambitions, built on the io startup co-founded by former Apple design chief Jony Ive that OpenAI bought for about $6.5 billion in 2025, with reports of an AI device and a smart speaker, and more than 400 former Apple employees now at the company.
By the numbers
Apple has taken OpenAI to court. In a lawsuit filed on Friday in the US District Court for the Northern District of California, the iPhone maker accuses OpenAI of trade-secret theft and breach of contract, alleging that former Apple employees who moved to the AI lab carried confidential designs with them to help OpenAI build consumer hardware that would compete directly with Apple. The complaint puts it bluntly: the case “is about Apple’s former employees stealing Apple’s trade secrets for the benefit of OpenAI.” Two names sit at the center of it: Tang Tan, now OpenAI’s hardware chief, who spent years at Apple leading product design for the iPhone and Apple Watch, and Chang Liu, a senior electrical engineer who worked at Apple for eight years before leaving for OpenAI.
The specific claims are unusually vivid for a corporate suit. Liu, Apple says, failed to return his company laptop after departing and exploited a previously unknown security bug to reach into Apple’s shared network folders and download more than 1,000 pages of confidential engineering files covering unannounced products. Tan, meanwhile, allegedly used Apple’s internal project codenames while recruiting for OpenAI, asked job candidates still at Apple to bring “actual parts” to interviews for “show and tell,” coached departing employees on how to slip past Apple’s security teams, and pressed them for details on products Apple has not yet revealed. Apple casts all of this as a coordinated pattern directed by OpenAI’s leadership rather than the actions of a few rogue hires. OpenAI had not responded publicly when the suit was filed.
What makes the case remarkable is how far the two companies have swung apart. In 2024 they announced a marquee partnership to weave ChatGPT into Apple Intelligence; now Apple is accusing OpenAI of poaching its people and its secrets to attack it in hardware. The context is OpenAI’s growing device ambitions, anchored by io, the startup co-founded by former Apple design chief Jony Ive that OpenAI acquired for roughly $6.5 billion in 2025, with reports pointing to an AI-first device and a smart speaker in the pipeline, alongside more than 400 former Apple employees who now work at the company. For investors this is more a temperature reading than a market mover: there is no damages figure yet, and trade-secret fights grind on for years. But it lays bare a widening battle over who will build the AI-native gadgets meant to succeed the smartphone, and how ugly the contest for the talent behind them is becoming.
This is a talent-and-IP war between the world's most valuable company and its most talked-about AI partner, fought over who gets to build the next everyday computing device. The reversal is the story: Apple and OpenAI shook hands in 2024 to bring ChatGPT to the iPhone, and now Apple is accusing OpenAI of raiding its people and its playbook to compete with it in hardware. For markets it is more signal than shock, there is no damages figure yet and litigation moves slowly, but it raises the temperature on the Apple-OpenAI relationship, spotlights how aggressively AI firms are poaching hardware and design talent, and hints at how bruising the coming fight over AI-native devices could be.
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