Apple sues OpenAI over alleged trade secret theft

Apple filed a lawsuit Friday against OpenAI over allegations of trade secret theft and breach of contract. Apple alleges the misconduct was directed by OpenAI’s senior leadership, including Chief Hardware Officer Tang Tan, and reflects a pattern of theft among OpenAI employees who previously worked at Apple. In a prepared statement, Apple said protecting its teams’ work and intellectual property is something it takes very seriously, adding that significant evidence has emerged suggesting individuals employed by OpenAI wrongfully took its confidential information regarding unreleased technologies, processes, and products, and that it is taking all appropriate steps to defend its work.

The suit, filed in the U.S. District Court for the Northern District of California, a federal court, accuses Tan of using Apple’s confidential project code names during OpenAI’s recruiting process, asking job candidates to bring in Apple hardware components to their interviews, coaching departing Apple employees on how to evade the company’s security procedures, and asking for details about the company’s unannounced products. Tan had spent 24 years at Apple before joining OpenAI, most recently as VP of product design for the iPhone and Apple Watch. The complaint also names Chang Liu, who spent eight years at Apple as a senior systems electrical engineer; Apple alleges Liu failed to return an Apple-issued laptop after leaving the company for OpenAI in 2026 and had used the computer to download confidential Apple technical documents.

The lawsuit arrives as OpenAI is rumored to be developing its first hardware product, which would likely compete with the iPhone. In April, industry analyst Ming-Chi Kuo suggested this device could be a smartphone that would rely on AI agents instead of apps. OpenAI acquired Jony Ive’s device startup io last year in a $6.5 billion deal to aid its hardware ambitions; io is named in the filing, though Ive is not.

Apple claims OpenAI and its partners used Apple’s confidential information while developing its own hardware product. Apple’s filing states that it lacks visibility into what has been happening internally at OpenAI, where, it says, such misconduct is normalized and exemplified by leadership, adding, “As a natural result, OpenAI’s nascent hardware business now rests on the shakiest of foundations, rotten to its core by its illegal reliance on misappropriated trade secrets.” OpenAI, in a statement shared on X, said it has no interest in other companies’ trade secrets and remains focused on building innovative technology that empowers people everywhere.

Why it matters

The lawsuit directly targets OpenAI’s hardware ambitions, which are rumored to include a smartphone that would compete with Apple’s core iPhone business.