Apple Sues OpenAI Over Alleged Theft of Hardware Trade Secrets

Apple has sued OpenAI and two former employees, accusing the artificial intelligence company of using stolen trade secrets to speed the development of its first consumer hardware product.

The lawsuit, filed Friday in the U.S. District Court for the Northern District of California, claims OpenAI encouraged Apple workers it was recruiting to share confidential product information and bring company materials to job interviews. Apple also named OpenAI affiliate io Products in the case.

Former Apple employees Tang Tan and Chang Liu are accused of taking or accessing protected information before and after joining OpenAI. Tan helped design the iPhone, Apple Watch and iPod and now serves as OpenAI’s chief hardware officer. Liu previously worked as an electrical engineer on sensitive Apple product development projects before joining OpenAI earlier this year.

Apple claims Liu accessed and downloaded several confidential hardware files using a company-issued device that remained in his possession after he left. Tan is accused of directing job candidates who still worked for Apple to bring physical components to interviews with OpenAI.

The filing alleges that OpenAI encouraged recruits to share protected material and offered guidance on how to avoid scrutiny while changing jobs. Apple argues that the conduct was part of a broader effort to gain access to its hardware knowledge rather than the isolated actions of individual workers.

The iPhone maker said it began reviewing whether confidential information had been compromised and found what it described as a pattern involving former employees who moved to OpenAI. Apple states that it contacted the AI company in February while the investigation was underway but did not receive a response.

Trade secrets are business information that gains value from remaining confidential. They may include unreleased product designs, engineering files, manufacturing methods, technical specifications and plans that are not generally known outside the company.

Federal and California trade secret laws prohibit obtaining, using or disclosing that information through improper means. Apple will need to identify the material it says was taken and show that it had commercial value because it was secret and that the company took reasonable steps to protect it.

The dispute also involves the legal line between protected company information and an employee’s general knowledge. Workers may usually change jobs and use the skills and experience they developed during earlier employment. A company cannot treat everything a former worker remembers as its property.

Trade secret protection may apply when someone takes specific files, designs, components or other material that was kept confidential. Apple’s claims focus on that distinction by arguing that Tan and Liu brought more than their professional experience to OpenAI.

A new employer may also face liability when it knowingly obtains or uses protected information brought by recruits. Apple alleges that OpenAI did more than hire experienced workers because the company encouraged them to provide confidential material during the recruitment process.

The complaint also includes breach of contract claims against the former employees. Confidentiality agreements commonly require workers to protect company information during their employment and after they leave.

Apple would need to show that Tan or Liu agreed to those duties, that the disputed material was covered by the agreements and that their conduct violated the terms. Contract claims can remain relevant even when a court later finds that some information does not meet every legal requirement for trade secret protection.

OpenAI has not publicly described the exact device it is developing. The company has said the project is intended to create a new way for people to interact with artificial intelligence beyond traditional screens and software interfaces.

Its hardware operation expanded through the acquisition of io Products, a product and engineering company co-founded by former Apple design chief Jony Ive, Tan and two other partners. The deal was valued at nearly $6.5 billion, and Ive is overseeing the device project.

OpenAI Chief Financial Officer Sarah Friar said in April that the company expected to release consumer hardware toward the end of 2026. The planned product could place OpenAI and Apple in overlapping parts of the consumer technology market.

The legal dispute marks a shift in a relationship that began as a partnership. Apple added access to ChatGPT to its devices in 2024, allowing users to turn to OpenAI’s system for some requests that Siri could not answer.

Hiring workers from a business partner or competitor is not itself unlawful. Technology companies routinely recruit employees with experience at other firms, while trade secret law seeks to protect confidential research without preventing workers from moving between jobs.

Apple’s case will depend on whether it can identify protected information and connect OpenAI, Tan and Liu to its improper acquisition, disclosure or use. The allegations involving downloaded files and physical components are likely to be central to that dispute.

Apple is seeking damages and court orders barring further use or disclosure of its trade secrets.