Apple sues OpenAI over alleged hardware trade secret theft

Apple has sued OpenAI and two former Apple employees in federal court, accusing them of misusing confidential hardware information tied to Apple products and suppliers. For investors watching the AI arms race, the case adds a legal fight to OpenAI’s push beyond software and into consumer devices.

The complaint, filed Friday in the U.S. District Court for the Northern District of California, names former Apple senior system electrical engineer Chang Liu, former Apple design executive Tang Yew Tan, OpenAI Foundation, OpenAI Group PBC and io Products, according to the filing.

Apple alleges that OpenAI benefited from trade secrets, meaning confidential business or technical information that can give a company an edge over competitors. The claims have not been proven in court.

According to Apple’s complaint, Liu left Apple in January after eight years with the company and did not return an Apple-issued laptop. Apple says he later accessed internal Apple systems through an authentication bug, which is a software flaw related to login or identity checks.

Apple’s lawyers allege Liu used that access while working at OpenAI and did not report it to Apple. The company claims he downloaded dozens of confidential hardware files, including material tied to unreleased products, engineering presentations, technical specifications and proprietary project data.

Apple also alleges Tan, who spent 24 years at Apple before becoming OpenAI’s chief hardware officer, used confidential information from his time at Apple to help OpenAI’s hardware work. The complaint says Tan referred to Apple internal project names during OpenAI interviews and asked candidates about unreleased products.

The filing also says OpenAI’s recruiting process sought “CAD/design artifacts,” prototypes, supplier information and details about employees’ work on Apple hardware. CAD refers to computer-aided design, the software and files engineers use to model products and components.

OpenAI’s hardware push is under scrutiny

The lawsuit comes after OpenAI acquired io Products, the hardware startup founded by former Apple design chief Jony Ive. Ive is not named in Apple’s complaint.

Apple says in the filing that OpenAI’s hardware division has hired more than 400 former Apple employees. Apple also says it contacted OpenAI in February about concerns that confidential Apple information could be entering the company and did not receive a response.

Decrypt reported that Apple and OpenAI did not immediately respond to requests for comment.

The case marks a turn in the relationship between the two companies. In 2024, Apple selected OpenAI to bring ChatGPT into Siri as part of Apple Intelligence, its suite of AI features for Apple devices.

OpenAI has also faced separate trade secret claims from Elon Musk’s xAI. In September, xAI sued OpenAI and alleged the ChatGPT maker recruited former employees to obtain confidential source code, training methods and data center strategies. OpenAI denied those allegations, and a federal judge dismissed the case in June after finding xAI had not shown that OpenAI encouraged a former employee to disclose confidential information, according to Decrypt.

Apple’s new complaint now puts OpenAI’s hardware ambitions directly in the spotlight, with the iPhone maker asking a federal court to weigh whether its confidential product knowledge was improperly carried into a rival AI device effort.

This story draws on original reporting from Decrypt.