Apple Sues OpenAI, Claims Former Employees Stole Trade Secrets
Key Takeaways
- Apple has filed a lawsuit in the U.S. District Court for the Northern District of California accusing OpenAI, two former Apple employees, and io Products of misusing confidential trade secrets tied to its hardware business.
- The complaint names former senior system electrical engineer Chang Liu and former iPhone and Apple Watch design executive Tang Yew Tan, alleging both carried proprietary Apple information into their work at OpenAI.
- Per Decrypt, Apple’s complaint alleges that OpenAI’s hardware division has hired more than 400 former Apple employees, though that figure comes from Apple’s own filing and has not been independently confirmed.
- The dispute follows OpenAI’s $6.5 billion acquisition of io Products, the startup founded by former Apple designer Jony Ive, who is not named in the suit.
What Apple Is Alleging
Apple’s complaint, filed Friday, targets OpenAI Foundation, OpenAI Group PBC, and io Products alongside the two former employees. According to Decrypt, the filing centers on claims that Chang Liu, who departed Apple in January after eight years at the company, failed to return an Apple-issued laptop and later exploited what Apple describes as a rare, previously unknown authentication flaw to gain access to internal shared network folders while already working at OpenAI.
Apple’s attorneys, as cited by Decrypt, stated that Liu did not disclose the unauthorized access, did not return the laptop, and did not delete the software that enabled the access once he became aware of it. Apple further alleges Liu downloaded numerous confidential hardware files, including material related to unreleased products, internal engineering presentations, technical specifications, and proprietary project data.
The second named individual, Tang Yew Tan, spent 24 years at Apple, where he held a design role tied to the iPhone and Apple Watch, before becoming OpenAI’s chief hardware officer. Apple alleges Tan drew on knowledge from his Apple tenure to benefit OpenAI’s hardware efforts. The complaint claims he used Apple’s internal project code names during OpenAI job interviews and asked candidates about products Apple had not yet released. Apple also alleges that OpenAI’s hiring process instructed some candidates to bring “actual parts” for a “show and tell” style session, and separately requested CAD and design artifacts, prototypes, supplier details, and information about candidates’ prior work on Apple hardware.
Why This Matters for the AI Hardware Race
The lawsuit lands at a moment when OpenAI is aggressively expanding beyond software into physical devices, a push that gained scale through its acquisition of io Products, the hardware venture co-founded by former Apple designer Jony Ive. Decrypt reports that deal was valued at $6.5 billion, underscoring how much capital and strategic weight OpenAI has placed on building consumer hardware that could eventually compete with Apple’s own product lines. Ive himself is not named as a defendant in Apple’s complaint.
Apple’s filing also states that OpenAI’s hardware division has brought on more than 400 former Apple staff, though that figure is drawn from Apple’s own lawsuit and has been described in other accounts as considerably smaller, meaning the actual scale of the hiring is disputed. For an AI company trying to build credible consumer devices, hiring engineers and designers with deep Apple experience is a natural talent strategy, but Apple’s complaint argues that strategy crossed into improper use of confidential information. Decrypt notes that Apple says it raised these concerns directly with OpenAI in February but did not receive a response, a gap of several months before the lawsuit was filed.
The case also arrives on the heels of a separate trade secret dispute involving OpenAI and Elon Musk’s xAI. In September, xAI sued OpenAI, alleging the ChatGPT maker recruited former employees to obtain confidential source code, training methods, and data center strategies. OpenAI denied the allegations, and a federal judge dismissed that lawsuit in June, with prejudice, meaning xAI is barred from bringing the same claims again, after finding xAI had failed to show OpenAI encouraged a former employee to disclose confidential information.
Apple’s suit marks a notable shift from its earlier partnership with OpenAI. In 2024, Apple tapped OpenAI to bring ChatGPT to Siri as part of its Apple Intelligence initiative. Earlier this year, however, Apple turned to Google’s Gemini to power its next generation of AI models after delays stalled the original rollout, leaving the companies now facing each other in court rather than collaborating on product development.
Hype Check
Claim: OpenAI’s hardware unit is stacked with more than 400 former Apple employees who brought trade secrets with them.
Reality: That figure comes directly from Apple’s lawsuit and has not been independently verified; other reporting suggests the actual number of former Apple staff at OpenAI’s hardware division is meaningfully smaller. The core allegations around specific files, code names, and the authentication bug remain claims made by Apple in a filed complaint, not findings established by a court.
Verdict: Partly substantiated but overstated. The lawsuit is real and detailed, but headline figures like hiring counts and the acquisition price should be treated as claims under litigation rather than confirmed facts until the case proceeds further. This is not financial advice.
Source
Researched with AI assistance, fact-checked and edited by a human. Not financial advice.