- Apple has signalled that it intends to pursue the case aggressively, framing it not as a narrow dispute over employee conduct but as a fundamental challenge to the way OpenAI has built its hardware division.
- OpenAI is navigating its transition from a research lab to a commercial juggernaut, facing competition from xAI, Google, and Anthropic while attempting to execute on its hardware ambitions.
Apple Inc. sued OpenAI and two former employees on Friday, alleging a systematic campaign to misappropriate trade secrets in order to accelerate the ChatGPT-maker’s push into consumer hardware — a dramatic legal escalation that transforms the two companies’ already fragile partnership into open confrontation.
The lawsuit, filed in the US District Court for the Northern District of California, accuses OpenAI of orchestrating a broad effort to acquire and exploit Apple’s confidential information through targeted recruitment of former employees, supplier relationships, and what Apple describes as a pattern of deliberate extraction of proprietary hardware knowledge.
The complaint names OpenAI Foundation, OpenAI Group PBC, hardware subsidiary io Products, and two former Apple executives as defendants.
“We have no interest in other companies’ trade secrets,” OpenAI said in a statement. “We remain focused on building innovative technology that empowers people everywhere.”
The legal action comes just weeks after OpenAI successfully fended off a challenge from Elon Musk’s xAI, and marks a new chapter in the increasingly fraught relationship between the iPhone-maker and the AI company whose chatbot it integrated into Siri just two years ago.
The allegations
At the centre of Apple’s complaint are two former employees: Chang Liu, a former senior system electrical engineer, and Tang Yew Tan, former vice president of product design for iPhone and Apple Watch, who now serves as OpenAI’s hardware chief.
Apple alleges that Liu failed to return a company-issued work laptop upon departure and subsequently exploited an authentication vulnerability to access Apple’s internal network, downloading what the complaint describes as “dozens of Apple’s confidential hardware-related files.”
The allegations against Tan — a 24-year Apple veteran whose career was largely defined by the iPhone — are more sweeping.
Apple claims Tan “methodically used Apple’s confidential information to benefit OpenAI” before his departure, emailing himself sensitive details about Apple’s supplier relationships and internal industry intelligence.
Perhaps most striking is Apple’s claim that Tan encouraged Apple employees to bring physical components to job interviews at OpenAI for “show and tell” sessions. The complaint cites one OpenAI job candidate who allegedly remarked that he “didn’t even know we could take those from the office” — a line that Apple’s lawyers are certain to wield as evidence of a culture of disregard for intellectual property boundaries.
The io products connection
The lawsuit also draws in io Products, the hardware startup founded by legendary former Apple designer Jony Ive that OpenAI acquired last year in a deal valued at $6.5 billion. Ive himself is not named as a defendant, but the acquisition — which signaled OpenAI’s serious intentions in consumer hardware — forms a critical backdrop to Apple’s claims.
Apple’s complaint suggests that OpenAI’s hardware ambitions, channelled through io Products, created the demand for the proprietary knowledge it alleges was systematically extracted. The iPhone maker claims it wrote to OpenAI as early as February of this year expressing concern that confidential information was making its way to the company and requesting discussions — but received no reply.
The silence, Apple implies, was telling.
Partnership under strain
The lawsuit exposes the fault lines beneath what had appeared, from the outside, to be a landmark technology partnership. In 2024, Apple announced the integration of ChatGPT into its Apple Intelligence ecosystem, allowing users to access OpenAI’s chatbot through Siri and enabling direct ChatGPT membership sign-ups from iOS settings.
That collaboration positioned OpenAI as a critical AI partner for Apple while giving the ChatGPT-maker access to Apple’s vast iPhone user base. Yet the relationship has been shadowed by mutual wariness, OpenAI was itself exploring legal options against Apple in May, including notification of an alleged breach of contract.
The lawsuit sets up a high-stakes battle over the future of consumer AI devices — a category that analysts believe could fundamentally reshape the smartphone market.
OpenAI is widely reported to be developing its own phone or AI-native device, one that might bypass traditional app-based operating systems and, if successful, redirect consumer attention away from the iPhone, Apple’s most important product.
Apple’s recently launched overhaul of Siri, delivered last month after two years of delays, underscores how much is at stake. The company is racing to embed AI deeply into its hardware ecosystem at the very moment its AI partner appears to be building a competing vision.
More than 400 former Apple employees now work at OpenAI, the complaint notes — a statistic Apple deploys not as an allegation of illegality in itself, but as context for what it frames as an inevitable contamination of confidential information.
“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,” the complaint states.
Supplier allegations
Apple’s complaint extends beyond former employees to OpenAI’s interactions with the broader Apple supply chain. The iPhone maker alleges that OpenAI employees sought confidential information directly from Apple suppliers, citing one instance in which a supplier allegedly performed what Apple described as a secret metal finishing technique under the belief — which Apple insists was false — that OpenAI had permission to use it.
This dimension of the case could have ripple effects across Apple’s carefully managed supplier ecosystem, potentially chilling the information-sharing practices that underpin hardware manufacturing relationships throughout the technology industry.
