Apple has sued OpenAI and two of its former employees, accusing the company of misappropriating confidential information and trade secrets to accelerate its consumer hardware ambitions.
The lawsuit, filed in the U.S. District Court for the Northern District of California, claims OpenAI orchestrated a coordinated effort to obtain Apple’s proprietary information through former employees, recruiting practices and supplier relationships. Apple is seeking damages, court injunctions and an order preventing the ChatGPT maker from using the alleged trade secrets.
The complaint names OpenAI Foundation, OpenAI Group PBC, io Products and former Apple executives Tang Yew Tan and Chang Liu as defendants. Tan previously served as Apple’s vice president of product design for the iPhone and Apple Watch before joining OpenAI, while Liu worked as a senior system electrical engineer.
The legal battle marks a sharp turn in the relationship between the two companies. Apple integrated ChatGPT into its ecosystem in 2024, but tensions have grown as OpenAI expanded into consumer hardware following its acquisition of former Apple designer Jony Ive’s startup, io Products.
Partnership turns rivalry
Apple alleges that Liu failed to return a company-issued laptop and later exploited an authentication bug to access Apple’s internal network, downloading “dozens of Apple’s confidential hardware-related files.”
The company also claims Tan emailed himself confidential supplier information and internal industry summaries before leaving Apple. According to the complaint, Tan encouraged Apple employees interviewing with OpenAI to bring Apple components to interviews for “show and tell” sessions.
“He has directed job candidates still working for Apple to bring ‘actual parts’ from Apple to their interviews for ‘show and tell’ sessions in which he and his team at OpenAI can elicit still more Apple confidential information,” Apple said in the filing.
Apple further alleges that OpenAI employees approached suppliers using proprietary Apple manufacturing techniques, including a confidential metal finishing process, while leading suppliers to believe they had Apple’s authorization.
Hardware race intensifies
The lawsuit comes as OpenAI pushes beyond software into hardware. The company acquired io Products for approximately $6.5 billion last year and has been widely reported to be developing consumer devices that could eventually compete with smartphones.
Apple said more than 400 former employees now work at OpenAI but argued that hiring former staff does not grant the company access to confidential information.
“That OpenAI now employs people who were once entrusted with Apple’s trade secrets does not entitle OpenAI to use that information to jumpstart its hardware efforts,” Apple wrote in its complaint.
The company also said it contacted OpenAI in February after becoming concerned that confidential information had reached the company but did not receive a response.
Industry analysts say the dispute reflects growing competition between the companies as they seek to define the next generation of consumer computing devices. Paolo Pescatore, an analyst at PP Foresight, told a publication: “Apple sees OpenAI moving from partner to potential rival, while OpenAI is trying to reduce its dependence on the iPhone and build a direct relationship with consumers.”