Apple Files OpenAI Lawsuit Over Alleged Theft of Hardware Trade Secrets

The filing

Apple filed suit against OpenAI on July 10 in federal court in the Northern District of California, in an apple openai lawsuit accusing the AI company of trade secret misappropriation tied to its upcoming hardware push. The complaint names OpenAI, its hardware subsidiary io Products, and two individual defendants: Tang Tan, a former Apple vice president who now serves as OpenAI's chief hardware officer, and Chang Liu, a former Apple electrical engineer who joined OpenAI's hardware team.

Apple's filing describes a scheme it says operated at multiple levels of OpenAI's organization, from technical staff up through Tan himself, and alleges coordination with outside business partners to extract Apple product information. None of these claims have been tested in court, and OpenAI disputes them. A company spokesperson said OpenAI has no interest in the trade secrets of other companies and remains focused on building its own technology.

What Apple says happened

Most of the specific allegations in the complaint center on the two named individuals rather than OpenAI as an institution, though Apple argues their conduct was directed and enabled by the company. Apple alleges Tan, in his role overseeing OpenAI's hardware team, encouraged Apple employees interviewing for OpenAI jobs to bring actual Apple components, including batteries, logic boards, and system-in-package parts, to interviews for informal show-and-tell sessions where more confidential details could be drawn out.

Separately, Apple alleges Liu retained a work-issued Apple laptop after leaving the company and later discovered he could still access Apple's internal cloud storage. According to the filing, Liu messaged a former colleague still at Apple joking about the access, and went on to download dozens of confidential files while working on OpenAI's hardware. Apple also alleges OpenAI circulated internal guidance to help departing Apple staff avoid the company's exit security checks, and that OpenAI approached Apple's own supply chain partners for confidential information as it built out its device program.

From integration partner to hardware rival

The lawsuit marks a sharp reversal in the apple openai partnership. In 2024, Sam Altman appeared at Apple's headquarters as the two companies announced that ChatGPT would be built into iOS as part of Apple Intelligence, giving OpenAI a direct line into hundreds of millions of iPhones. That integration is still live, though Apple's own upcoming Siri overhaul this fall is reportedly built on Google's Gemini models rather than OpenAI's, a sign the companies were already drifting apart on the software side before this suit.

Relations cooled further after OpenAI moved into hardware. In May 2025, OpenAI acquired io Products, the startup co-founded by former Apple chief design officer Jony Ive, in an all-stock deal reported at roughly $6.4 billion. That deal is the real center of gravity for this dispute: Apple's complaint frames OpenAI's hardware buildout, not its software integration, as the setting for the alleged theft.

The device Apple says it's protecting against

OpenAI has not confirmed exact specifications for its first consumer device, but reporting since the io acquisition points to a screenless, voice-first product built around ambient, always-on interaction rather than a screen. Executives have described a goal of reducing screen time rather than competing head-on with the iPhone, and have discussed multiple form factors internally, including an earbud-style wearable and a pen-shaped device. Altman said in November 2025 that OpenAI had finished its first working prototypes.

Timelines have slipped repeatedly. OpenAI initially pointed to a second-half-2026 unveiling, but more recent court filings in a separate trademark dispute indicate OpenAI does not expect to ship the product to customers before the end of February 2027. That trademark fight, brought by a startup called Iyo over the use of the name io, has already forced OpenAI to drop that branding from the hardware effort. The Apple suit adds a second, more serious legal front just as OpenAI is preparing for what is expected to be a historic IPO.

Why this matters beyond the two companies

For US operators and founders watching the AI hardware race, the case underscores how much of it now runs through the same small pool of ex-Apple hardware talent. OpenAI's hardware leadership, including Tan and Ive, was built largely by recruiting people who spent years inside Apple's design and engineering culture. That talent pipeline is exactly what Apple's complaint targets, and a serious ruling against OpenAI could complicate hiring across the entire AI hardware sector, not just at OpenAI.

The suit also lands amid a broader pattern of high-profile trade secret and IP litigation touching OpenAI. Two months before this filing, OpenAI won a jury verdict against Elon Musk, who had argued the company waited too long to sue over claims that Altman and co-founder Greg Brockman abandoned its original nonprofit structure. In 2023, the New York Times sued OpenAI and Microsoft over the use of its articles in AI training data. None of these prior cases determine the outcome here, but they show OpenAI operating under sustained legal pressure on multiple fronts as it scales.

What to watch next

• Apple's claims are allegations only; OpenAI has denied wrongdoing and no court has ruled on the merits.
• Watch for OpenAI's formal response and any motion to dismiss in the Northern District of California.
• The ChatGPT integration inside Apple Intelligence remains live for now; neither company has said the suit will affect it.
• OpenAI's hardware timeline, already pushed to early 2027, faces a second unrelated trademark dispute over the io name.
• The case adds legal uncertainty for OpenAI heading into its anticipated IPO.

Sources