Apple Sues OpenAI and Former Employees for Alleged Trade Secret Theft
Apple has filed a federal lawsuit against OpenAI and former employees, accusing the AI company of orchestrating a systematic campaign to steal confidential hardware designs and trade secrets.
Apple has initiated a significant legal battle, filing a federal lawsuit against OpenAI and several former employees, alleging a deliberate and systematic campaign to pilfer confidential hardware designs, manufacturing processes, and crucial supplier relationships. The lawsuit, lodged in the U.S. District Court for the Northern District of California, names OpenAI, its hardware subsidiary io Products, Chief Hardware Officer Tang Yew Tan, and former senior systems electrical engineer Chang Liu as defendants. Apple asserts that OpenAI has actively recruited over 400 ex-Apple employees, leveraging their insider knowledge to extract proprietary information as the AI firm aims to develop its own consumer hardware.
The complaint details how Tang Yew Tan, a 24-year veteran at Apple who previously held a Vice President role for iPhone and Apple Watch product design, allegedly used his intimate knowledge of unannounced Apple projects. During interviews with current Apple employees, Tan reportedly employed internal project codenames to probe candidates about future Apple products and even requested that job applicants bring physical components from Apple offices for review. This practice reportedly surprised some candidates, who were unaware they could remove such materials.
Further allegations point to Chang Liu, who transitioned from Apple to OpenAI in January 2026. Apple claims Liu retained an Apple-issued laptop after his departure and exploited a previously unknown authentication flaw to maintain access to Apple's network storage. Through this breach, Liu allegedly downloaded dozens of confidential files, including extensive engineering documentation and detailed presentations on manufacturing procedures for complex logic boards. Instead of reporting the vulnerability, Liu reportedly made light of it in internal communications.
Beyond direct data exfiltration, Apple accuses OpenAI of indirectly obtaining sensitive information. The lawsuit claims OpenAI misled a long-standing manufacturing partner into executing Apple's proprietary metal-finishing technique without authorization. Additionally, OpenAI allegedly approached a battery and power supplier, using insider terminology to elicit details about specific Apple components, thereby circumventing direct inquiries.
Apple also highlights a broader pattern of departing employees deliberately evading exit security reviews, a behavior it attributes to coaching from OpenAI on how to avoid detection. The company contends that this systematic approach to acquiring trade secrets is not an isolated incident but an ongoing strategy by OpenAI to gain a competitive edge in the rapidly evolving AI hardware market.
The lawsuit centers on claims of trade secret misappropriation and breach of contract. It underscores the escalating competition between tech giants like Apple and burgeoning AI leaders like OpenAI, particularly as AI companies venture into the hardware domain. The outcome of this legal dispute could have significant implications for intellectual property protection and competitive practices within the technology sector, especially concerning the development of AI-powered consumer devices.