Apple sues OpenAI for alleged trade secret theft in major Silicon Valley clash

rotten to its core by its illegal reliance on misappropriated trade secrets
Apple's characterization of OpenAI's hardware business in the lawsuit filing.

Apple claims OpenAI orchestrated theft of confidential hardware information through 400+ former employees and Tang Tan, ex-VP of product design now OpenAI's chief hardware officer. The lawsuit alleges OpenAI coached departing Apple staff on avoiding detection and surreptitiously downloaded confidential files about unreleased devices like smart glasses and AI-enabled AirPods.

  • Apple sued OpenAI on Friday in Northern District of California
  • More than 400 former Apple employees now work at OpenAI
  • Tang Tan, OpenAI's chief hardware officer, was previously Apple's VP of product design
  • OpenAI acquired io Products for $6.5 billion last year
  • Chang Liu, a former iPhone engineer, allegedly downloaded dozens of confidential files in January

Apple filed a major lawsuit against OpenAI, accusing the AI startup of systematically stealing trade secrets about unreleased products through departing employees and its hardware chief, a former Apple executive.

Apple filed a lawsuit against OpenAI on Friday, accusing the artificial intelligence company of orchestrating a systematic campaign to steal trade secrets about unreleased products. The complaint, filed in federal court in Northern California, names OpenAI and Tang Tan, the company's chief hardware officer, as defendants. Tan was previously Apple's vice president of product design, overseeing development of the iPhone, Apple Watch, AirPods, and other hardware.

The legal action marks a sharp reversal for two companies that had positioned themselves as partners. OpenAI's ChatGPT technology powers features in Apple Intelligence and Siri, and the companies announced their collaboration two years ago with considerable fanfare. But that relationship has fractured as OpenAI has pursued its own hardware ambitions, recruiting heavily from Apple's ranks. According to the lawsuit, more than 400 former Apple employees now work at OpenAI.

Apple alleges that OpenAI encouraged departing workers to share confidential information during job interviews and coached them on how to avoid detection during their exits. The suit specifically names Chang Liu, a former iPhone hardware engineer who joined OpenAI in January. Apple claims that over several weeks, Liu downloaded dozens of confidential files containing detailed information about unreleased products, engineering presentations, technical specifications, and proprietary project data. The company says OpenAI advised departing employees not to disclose their next employer and instructed them on how to avoid the "dreaded walk out"—the immediate removal from company premises—so they could continue accessing Apple's secrets during a standard two-week notice period.

The centerpiece of Apple's complaint is Tan's role. He left Apple in 2024 to co-found io Products with Jony Ive, the legendary Apple design executive, and Evans Hankey, another Apple design veteran. OpenAI acquired io Products last year for $6.5 billion. Apple contends that Tan, in his new position at OpenAI, orchestrated the recruitment and information-sharing scheme at every organizational level, from technical staff to executive leadership.

Apple is seeking a jury trial and demanding that OpenAI cease the alleged practices, destroy any proprietary materials, and redesign upcoming products to remove any Apple technology. The company said it attempted to resolve the dispute out of court months ago but received no response. OpenAI did not immediately respond to requests for comment.

The lawsuit underscores the intense competition unfolding in AI hardware. Apple, OpenAI, Meta, and others are racing to develop devices that place artificial intelligence at the center of the user experience, betting that the smartphone era is giving way to something new. Apple is developing smart glasses, wearable pendants, and camera-equipped AirPods as part of this pivot. OpenAI's hardware ambitions have accelerated since acquiring io Products, and the company is preparing for an initial public offering in coming months.

The relationship between the two companies had already shown signs of strain beyond the hardware dispute. Bloomberg reported earlier this year that OpenAI was considering its own legal action against Apple, claiming the partnership around ChatGPT in Siri had failed to deliver expected benefits. OpenAI had considered sending a breach of contract notice. The arrangement allowed iPhone users to access ChatGPT results through Siri and use the technology for text generation and visual analysis, and was later expanded to include image creation in Apple's Image Playground app.

Apple said in a statement that "significant evidence has emerged suggesting individuals employed by OpenAI wrongfully took Apple's secret and confidential information regarding our unreleased technologies, processes and products." The company characterized OpenAI's nascent hardware business as "rotten to its core by its illegal reliance on misappropriated trade secrets." The case arrives as OpenAI prepares for public markets, adding another layer of complexity to the company's path forward.

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.
— Apple, in the lawsuit
Significant evidence has emerged suggesting individuals employed by OpenAI wrongfully took Apple's secret and confidential information regarding our unreleased technologies, processes and products.
— Apple, in a statement
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Inventor

Why does this matter now? OpenAI and Apple have been working together for two years. What changed?

Model

The partnership was always about software—ChatGPT in Siri, image generation, that kind of thing. But OpenAI decided to build hardware. That's when the tension became real. They're not just a software partner anymore; they're a competitor.

Inventor

So the lawsuit is really about competition, not theft?

Model

It's framed as theft, and Apple has specific allegations—files downloaded, coaching on how to avoid detection. But yes, underneath it is the fact that OpenAI hired 400 Apple people and started building devices. That's the threat.

Inventor

Tang Tan is the key figure here. He was designing iPhones and now he's at OpenAI. Did he actually steal anything, or did he just leave and take his expertise with him?

Model

Apple's claim is more specific than that. They say he encouraged current employees to share confidential information during job interviews, and that he coordinated a broader pattern. Whether a court agrees is another question, but the allegation goes beyond just hiring a talented executive.

Inventor

What happens if Apple wins?

Model

OpenAI would have to destroy proprietary materials, stop using Apple's technology, and potentially redesign products. But the bigger issue is timing—OpenAI is about to go public. A major lawsuit and potential damages could complicate that significantly.

Inventor

Did Apple try to stop this before suing?

Model

They say they did. They reached out months ago asking OpenAI to stop and destroy the materials. OpenAI didn't respond, so Apple filed. That matters legally—it shows they tried to resolve it.

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