Apple Sues OpenAI Over Alleged Trade Secret Theft

Apple has filed a lawsuit against OpenAI in US district court in San Jose, accusing the AI company and its chief hardware officer of systematically stealing trade secrets through a coordinated effort to extract confidential information from departing Apple employees.

The lawsuit targets Tang Tan, OpenAI's hardware chief who spent 24 years at Apple overseeing iPhone product design, along with OpenAI itself and several other defendants including electrical engineer Chang Liu and OpenAI's io Products unit.

The allegations

According to the complaint, Tan and OpenAI colleagues allegedly encouraged Apple employees leaving for or considering joining OpenAI to bring proprietary technology with them. The lawsuit claims Tan coached recruits on evading Apple's data security protocols and specifically requested that job candidates bring "actual parts" from Apple—including batteries, logic boards, and shields—to interviews for "show and tell" sessions.

Apple's investigation, which relied on data from employee devices, uncovered what the company describes as a pattern of suspicious behavior. The lawsuit alleges that Liu downloaded dozens of confidential hardware files, including presentations on manufacturing complex circuit boards, and never returned his company-issued laptop. Apple discovered Liu still had access to internal file-sharing systems due to a bug that has since been fixed.

The complaint further alleges that Tan obtained and shared an internal Apple document explaining security procedures for departing workers, which OpenAI recruiters then used to counsel employees on avoiding disclosure of their new employer and prolonging system access.

Why it matters

This case could become the most significant intellectual property battle in Silicon Valley since Waymo sued Uber in 2017 over autonomous vehicle technology theft—a dispute that ended with Uber paying $245 million. The lawsuit arrives as Apple and OpenAI transition from partners to competitors in AI-powered consumer devices, with OpenAI having hired more than 400 former Apple employees and acquired io Products for $6.5 billion in 2024. The outcome could set precedents for how tech companies protect trade secrets in an era of aggressive talent recruitment and establish boundaries for employee mobility in competitive markets.

The business context

Apple and OpenAI announced a partnership in 2024 to distribute ChatGPT on Apple devices, but that relationship has deteriorated. Apple has increasingly turned to Google's Gemini AI technology instead. OpenAI is now developing what it describes as a "family" of AI-powered devices, with reports suggesting an AI-powered voice-controlled tabletop device in development, though the company indicated in court filings that no products will ship until at least April 2027.

The lawsuit also alleges that OpenAI's io unit approached Apple suppliers attempting to replicate proprietary work, including misleading one supplier into performing a "specific trade secret metal-finishing technique" by suggesting Apple had approved the project.

Apple raised initial concerns with OpenAI in February but received no response, prompting further investigation and the lawsuit. Apple spokesperson Hannah Smith said the company "will always defend our teams' hard work and innovations."

Apple is seeking an injunction to stop the alleged theft, monetary damages, and return of any stolen property and data. OpenAI and Tan did not immediately respond to requests for comment.

These details were first reported by WIRED.