A full-blown legal war has erupted between two of the world's most powerful technology companies. Apple has gone to court with serious accusations against OpenAI, claiming the AI firm built its fledgling hardware business on stolen trade secrets and sensitive hardware information lifted from Apple. The lawsuit has been filed in a US district court in San Jose.
At the heart of the case is OpenAI chief hardware officer Tang Tan, who spent 24 years at Apple and oversaw iPhone product design. Apple alleges that Tan and his colleagues at the AI company encouraged people who were leaving Apple, or thinking about leaving, to bring proprietary and unreleased technology with them. Tan allegedly coached recruits on how to slip past Apple's data security protocols and directed them to carry confidential Apple parts to job interviews at OpenAI.
Apple's Blistering Language
Apple did not hold back in the filing. The company writes that OpenAI's nascent hardware business now rests on the shakiest of foundations, rotten to its core by its illegal reliance on misappropriated trade secrets. Apple says OpenAI, under mounting pressure to deliver its first commercial hardware product, resorted to taking unlawful shortcuts.
Apple spokesperson Hannah Smith said the company will always defend its teams' hard work and innovations, and is taking all appropriate steps to do so. OpenAI and Tan, on the other hand, have not yet responded to the accusations.
Silicon Valley's Biggest Fight
This lawsuit could become the highest-stakes and most dramatic battle over intellectual property theft that Silicon Valley has seen in years. The last one of this scale came in 2017, when autonomous ride-hailing company Waymo accused Uber of stealing hardware designs after Uber brought on a former Waymo engineer who had left with thousands of confidential files. The following year, in the middle of the trial, Uber agreed to pay $245 million to settle the case.
What makes the fight all the more striking is that Apple and OpenAI have been partners since 2024, when the two announced a landmark deal to bring ChatGPT to iPhones, MacBooks, and iPads. But the relationship has frayed over the past few years. That pushed Apple to lean more heavily on Google's Gemini technology as the foundation for its in-house AI models. The two are now expected to compete far more fiercely in the coming years in the emerging market for AI-powered consumer devices.
More Than 400 Former Apple Employees
According to the lawsuit, OpenAI has hired more than 400 former Apple employees. Several of them are veterans now leading OpenAI's development of AI-powered consumer devices. Last year, OpenAI paid $6.5 billion to acquire a startup called io Products, cofounded by longtime Apple executives including Tan, Scott Cannon, Evans Hankey, and famed designer Jony Ive.
io Products and Chang Liu are also named as defendants in the lawsuit. Liu is an electrical engineer at OpenAI who was at Apple until January. He has not yet responded to the allegations either.
A Laptop That Was Never Returned
Apple's investigation into the alleged theft rests on data and messages gathered from its employees' devices. The company caught on early this year when Liu never returned his company-issued laptop and wrote to a former colleague that he still had access to Apple's internal file-sharing system. In the filing, Apple says that access was enabled by a bug that has since been fixed.
The lawsuit alleges that Liu downloaded dozens of Apple's confidential hardware-related files, including a presentation on manufacturing and testing the complex circuit boards used in Apple's hardware. It further states that Liu coached an Apple employee he was recruiting to OpenAI on how to avoid trouble with the security team when copying confidential Apple files.
Apple wrote to OpenAI in February, raising its initial concerns about the alleged theft, but received no response. That silence led to further investigation and, ultimately, the lawsuit.
Suppliers and Actual Parts
Apple learned that before leaving, Tan emailed himself information about the company's suppliers. Other employees leaving for OpenAI did the same, Apple alleges. Beyond that, the lawsuit claims Tan directed job candidates still working at Apple to bring actual parts from Apple to their interviews for show and tell sessions, where he and his team at OpenAI could draw out even more of Apple's confidential information. The filing names batteries, logic boards, and shields as the sought-after components.
In another instance, Apple identified a then-Apple employee screenshotting and downloading files relating to a highly confidential Apple project in the hours before an interview with Tan at OpenAI.
Tan is also accused of taking an internal Apple document meant for managers that explains security procedures for departing workers. Tan and OpenAI recruiters allegedly used the file to counsel departing Apple employees to avoid revealing their new employer, to prolong their access to company systems, and to avoid signing any exit documents.
The lawsuit states that Apple has uncovered a concerning pattern among employees who leave and then go to work for OpenAI. Departing employees took steps to evade security measures, such as failing to give two weeks' notice and ignoring outreach from security personnel to schedule exit processes and security reviews.
Accusations Against the io Unit
Apple's accusations against OpenAI's io unit include that it approached at least two of the iPhone maker's suppliers in an attempt to replicate their work. According to the lawsuit, one company carried out a specific trade secret metal-finishing technique for OpenAI after being misled into believing Apple had signed off on the project. OpenAI approached the other supplier, which works on batteries, with targeted questions to learn more about Apple components and advance its own interests.
What OpenAI Is Building
OpenAI has said relatively little about its hardware efforts, other than that it is developing a family of AI-powered devices. While the company had previously planned to use the io branding for its hardware products, it has since indicated in court filings that it will choose a new name and will not ship any devices to customers until at least April 2027. OpenAI is said to be working on an AI-powered puck that sits on a tabletop and can be controlled by voice.
Apple is seeking an injunction to bar OpenAI from continuing the alleged theft. It is also seeking monetary damages and the return of any pilfered property and data.
