Apple sues OpenAI for systematically poaching trade secrets
Apple just filed a federal lawsuit against OpenAI and two former employees, accusing the company of running a coordinated operation to steal confidential product information and use it to build its own hardware division.
The suit, filed July 10 in the U.S. District Court for the Northern District of California, names OpenAI, Chief Hardware Officer Tang Tan, former engineer Chang Liu, and io Products, the design startup OpenAI acquired from Jony Ive last year for $6.5 billion. Ive himself is not named as a defendant.
This is not a routine IP dispute. Apple’s language is combative and specific.
Tang Tan spent 24 years at Apple, most recently as VP of product design for iPhone and Apple Watch. According to the complaint, he used Apple’s confidential project code names during OpenAI recruiting, asked job candidates to bring actual Apple hardware components to their interviews as “show and tell” props, and coached departing employees on how to evade Apple’s security procedures. He also allegedly emailed himself details about key supplier meetings before leaving.
Chang Liu, a senior systems electrical engineer who spent eight years at Apple, left for OpenAI in January 2026. Apple says he never returned his company-issued laptop, discovered a bug that let him access Apple’s cloud file storage after his departure, and downloaded dozens of confidential files about unreleased products, engineering presentations, and proprietary project data.
Liu also allegedly shared Apple’s confidential information with other Apple employees applying for jobs at OpenAI and advised at least one of them on what to study before their interview.
Apple says it sent OpenAI a letter in February to raise concerns. No response came back.
The lawsuit also accuses OpenAI of using a proprietary Apple metal finishing technique after misleading a partner into believing it had Apple’s permission. Apple frames this as part of a broader pattern: OpenAI’s leadership normalized the theft, and the company’s “nascent hardware business now rests on the shakiest of foundations, rotten to its core by its illegal reliance on misappropriated trade secrets.”
The context makes this explosive. OpenAI is expected to unveil its first hardware product this month, reportedly a keyboard-like device for AI interaction. Analyst Ming-Chi Kuo suggested earlier this year it could eventually become a full smartphone that relies on AI agents instead of apps, which would put it in direct competition with the iPhone.
Over 400 former Apple employees now work at OpenAI, according to the lawsuit. CNN counted at least 10 engineers who moved directly from Apple to OpenAI in recent months.
The relationship between the two companies has been deteriorating for months. Apple integrated ChatGPT into its devices in 2024, but shifted more AI features to Google’s Gemini this year. Bloomberg reported in May that OpenAI was preparing its own legal action against Apple, claiming Apple hadn’t sufficiently promoted OpenAI products across its ecosystem.
Now both companies are pointing lawyers at each other while OpenAI prepares for an IPO.
OpenAI spokesperson Drew Pusateri told the BBC: “We have no interest in other companies’ trade secrets.” Apple told the BBC the lawsuit is the result of “significant evidence.”
Apple is asking the court to immediately prohibit OpenAI from using or disclosing any alleged confidential information, require the return of all Apple materials, and award unspecified monetary damages.
The discovery process in this case will be brutal. Apple will get to dig through OpenAI’s internal communications, hiring practices, and hardware development records. If even half of what Apple alleges is true, the fallout could delay OpenAI’s hardware ambitions and complicate its IPO timeline.
This is also a story about how the talent war between big tech and AI labs has crossed from aggressive recruiting into alleged corporate espionage. When the person running your hardware division is accused of coaching people through security evasion at his former employer, that is not a normal hiring story.
Sources: TechCrunch, BBC, Axios, CNN, Reuters, Hacker News discussion