Apple sues OpenAI, ex-employees over trade secrets theft

Apple has sued OpenAI and two former employees, alleging misuse of trade secrets for consumer hardware. The case sharpens tensions between partners as both companies push deeper into AI devices.

In Short

• Lawsuit claims OpenAI accessed confidential Apple hardware files illegally
• Apple alleges OpenAI is using stolen info to boost its hardware plans
• More than 400 former Apple staff now work at OpenAI, raising concerns

Apple has sued OpenAI, its commercial arm, the OpenAI Foundation, io Products, and two former employees, alleging they misappropriated the iPhone maker's trade secrets to accelerate OpenAI's expansion into consumer hardware.

The lawsuit, filed on Friday in the US District Court for the Northern District of California, accuses OpenAI of orchestrating a broad effort to systematically acquire and exploit Apple's confidential information through former employees, recruiting practices, and supplier relationships.

OpenAI did not immediately respond to a request for comment.

The legal battle marks a dramatic escalation in tensions between the two companies as competition intensifies in the artificial intelligence sector. The dispute also underscores a broader contest over the future of AI-powered consumer devices that may operate without traditional apps or operating systems. Analysts believe OpenAI is working on a phone or another consumer device that could eventually compete with Apple's iPhone.

"Apple sees OpenAI moving from partner to potential rival, while OpenAI is trying to reduce its dependence on the iPhone and build a direct relationship with consumers," said PP Foresight analyst Paolo Pescatore. "Even if the allegations are not proven, the lawsuit could delay OpenAI's hardware ambitions and further weaken what is already becoming an increasingly fragile partnership."

The lawsuit comes shortly after OpenAI successfully fended off a legal challenge from Elon Musk's xAI.

Apple named Chang Liu, a former senior system electrical engineer, and Tang Yew Tan, Apple's former vice president of product design for the iPhone and Apple Watch, as defendants. Neither immediately responded to requests for comment.

According to the complaint, Liu failed to return a company-issued work laptop and later exploited an authentication bug to access Apple's internal network, downloading "dozens of Apple's confidential hardware-related files."

Apple also alleged that Tang, who now serves as OpenAI's hardware chief, "methodically" used Apple's confidential information to benefit OpenAI by emailing himself information about Apple suppliers and internal industry summaries before leaving the company. According to his LinkedIn page, Tang spent most of his 24-year career at Apple working on the iPhone.

The company further alleged that Tang encouraged Apple employees to bring Apple parts to OpenAI job interviews for "show and tell" sessions. Apple cited an incident in its filing in which one OpenAI job candidate allegedly remarked that he "didn't even know we could take those from the office."

Apple claimed it contacted OpenAI in February to raise concerns that its confidential information was making its way to the AI company and requested discussions on the matter. According to the complaint, OpenAI did not respond.

The iPhone maker said more than 400 former Apple employees now work for OpenAI, adding that while many of them possess knowledge of Apple's confidential information, that does not give OpenAI the right to use it.

"That OpenAI now employs people who were once entrusted with Apple's trade secrets does not entitle OpenAI to use that information to jumpstart its hardware efforts," Apple wrote in its complaint.

Apple also accused OpenAI employees of seeking confidential information from Apple suppliers. In one instance, the company alleged that a supplier carried out what Apple described as a secret metal finishing technique because it believed OpenAI had Apple's authorisation to use the process.

The lawsuit comes despite an existing partnership between the two companies. In 2024, Apple integrated its Apple Intelligence features across its apps, including Siri, and brought OpenAI's ChatGPT to Apple devices. The partnership allows users to access ChatGPT through Siri, while iPhone users can also subscribe to ChatGPT memberships directly from the iOS settings menu.

Apple rolled out a long-delayed overhaul of Siri last month, two years after first announcing major upgrades that faced repeated delays.

OpenAI has also expanded its hardware ambitions through its $6.5 billion acquisition of hardware startup io Products, founded by former Apple designer Jony Ive, last year. Apple named io Products as a defendant in the lawsuit, though Ive is not named in the case.

A person familiar with the matter had told Reuters in May that OpenAI was exploring legal options against Apple, including notifying the technology giant of a possible breach of contract, although it was not certain that a full lawsuit would be filed.

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