Apple sues OpenAI, former employees over alleged theft of hardware trade secrets

Apple has filed a lawsuit against OpenAI, its commercial arm, hardware startup io Products, and two former Apple employees, alleging the misappropriation of trade secrets to support OpenAI's expansion into consumer hardware.

The lawsuit, filed in the U.S. District Court for the Northern District of California, accuses OpenAI of systematically obtaining Apple's confidential information through former employees, recruitment practices and supplier relationships to accelerate the development of AI-powered hardware products.

Apple named Chang Liu, a former senior system electrical engineer, and Tang Yew Tan, the former vice president of product design for the iPhone and Apple Watch, as defendants.

According to the complaint, Liu failed to return a company-issued laptop and later exploited an authentication flaw to access Apple's internal network, downloading confidential hardware-related files. Apple also alleged that Tan emailed himself information about suppliers and internal industry reports before leaving the company and used Apple's confidential information to benefit OpenAI.

The iPhone maker further claimed that Tan encouraged Apple employees interviewing at OpenAI to bring Apple components for "show and tell" sessions. Apple also alleged that OpenAI employees sought confidential information from Apple suppliers and used a proprietary metal-finishing technique without authorization.

Apple said it had contacted OpenAI in February to raise concerns that its confidential information was being used by the company but received no response.

The lawsuit notes that more than 400 former Apple employees now work for OpenAI, arguing that while hiring former employees is lawful, using Apple's trade secrets is not.

OpenAI denied the allegations, saying: "We have no interest in other companies' trade secrets. We remain focused on building innovative technology that empowers people everywhere."

The legal action comes amid growing competition between the two companies in artificial intelligence. While Apple integrated ChatGPT into its devices in 2024 through a partnership with OpenAI, the relationship has become increasingly strained as OpenAI expands into hardware.

Last year, OpenAI acquired io Products, the hardware startup founded by former Apple designer Jony Ive, in a $6.5 billion deal to strengthen its consumer hardware business. Ive has not been named as a defendant in the lawsuit.

Legal experts said the case could become significant because it involves alleged trade secret theft related to hardware development, an area that has seen fewer AI-related legal disputes than software.