OpenAI is stealing Apple’s trade secrets and confidential information at every level.
OpenAI has been sued by Apple. On July 11, Apple filed a complaint with the U.S. District Court for the Northern District of California. The list of defendants includes not only OpenAI, but also io Products, the hardware company acquired by former Apple Chief Design Officer Jony Ive, as well as two former Apple employees. The accusation is straightforward: misappropriation of trade secrets and breach of contract.
Just two years ago, Apple and OpenAI were the model couple on stage together. At WWDC 2024, ChatGPT was officially announced to be integrated into Siri. OpenAI CEO Sam Altman sat in the audience, and Apple’s Senior Vice President of Software Engineering, Craig Federighi, called OpenAI a “pioneer and market leader” in AI. Now, Apple’s complaint states: “From technical team members to the Chief Hardware Officer, to coordination with business partners, OpenAI is stealing Apple’s trade secrets and confidential information at every level.” The harsh language reflects Apple’s fury. Apple’s demands are comprehensive: damages, injunctive relief, and destruction of all confidential materials. In addition, Apple demands that OpenAI redesign its upcoming hardware products to purge Apple’s technology from them. Apple’s official statement reads: “Recent substantial evidence shows that OpenAI employees have improperly obtained Apple’s secrets and confidential information regarding unreleased technologies, processes, and products. We will always defend our teams’ hard work and innovative achievements.”
OpenAI’s Director of Strategic Communications, Drew Pusateri, responded on X: “We have no interest in other companies’ trade secrets. We remain focused on building innovative technology that empowers everyone.”
1. “That’s hilarious” – four words now part of court evidence
The most striking detail in the complaint involves Chang Liu. This engineer spent eight years at Apple as a senior systems electrical engineer, working on iPhone hardware development, and jumped to OpenAI this January. According to Apple, he left without following any of the required offboarding procedures. Apple contacted him to remind him of his confidentiality agreement, schedule an exit interview, and confirm the return of his devices – he ignored all of it. Then came the dramatic twist. Apple alleges that after joining OpenAI, Liu discovered a previously unknown authentication bug in Apple’s corporate systems. Exploiting this loophole, he used his unreturned laptop to continue accessing Apple’s cloud file storage. He even messaged a former colleague still at Apple, boasting: “LOL, I just found out I can still access the company’s internal network storage – that’s hilarious.” That message now sits verbatim in the federal court complaint. Apple claims that over the following weeks, while working on hardware development at OpenAI, Liu downloaded dozens of Apple confidential files: detailed information on unreleased products, engineering presentations, technical specifications, proprietary project data – many clearly marked “confidential.” He also used a former coworker’s work computer to access Apple’s network. But that’s not all. Apple says that when Liu was recruiting that former colleague to OpenAI, he also taught her techniques for copying confidential files, advising how to “avoid trouble with the security team,” and suggested they switch to Line chat to avoid detection by Apple. According to TechCrunch’s review, Liu even gave at least one Apple colleague applying to OpenAI a study guide: what to review before the interview. Yes, even exam preparation was provided.
2. Interview? Please Bring Your Own iPhone Parts
If Liu’s actions could still be considered individual misconduct, the accusations against Tang Tan are of a completely different nature. Who is Tan? A 24‑year veteran at Apple, rising to Vice President of Product Design, overseeing iPhone, Apple Watch, and AirPods, and working alongside Jony Ive for years. In early 2024, he left Apple and co‑founded the hardware company io Products with Ive and another Apple design veteran, Evans Hankey. In 2025, OpenAI acquired io in an all‑stock deal worth approximately $6.5 billion, and Tan became OpenAI’s Chief Hardware Officer, also serving as the top recruiter for hardware projects. Ive now leads OpenAI’s device design as an independent contractor. Neither Ive nor Hankey are named in the lawsuit. Apple’s list of charges against Tan is as follows: Before leaving Apple, Tan first met with “OpenAI or its collaborators” to discuss a major Apple supplier, then emailed supplier‑related information to himself. After joining OpenAI, when interviewing current Apple employees, he would directly use Apple internal project codenames to probe for details about unreleased products, including component selection and supplier qualification processes. The most outrageous allegation: Apple claims Tan asked candidates still working at Apple to bring “physical parts” to the interview site. Axios extracted the specific list from the complaint: batteries, logic boards, SIP packages – under the guise of “show and tell” exchanges, so the OpenAI team could dig deeper into confidential information on the spot. And the requested items also included CAD design files and prototype models. Bringing a portfolio to an interview is common; bringing your former employer’s motherboard is unprecedented. The offboarding coaching was also comprehensive. Tan had in his possession an Apple internal “Need to Know” exit process document – whether he kept it or obtained it is unclear – which he used to train new OpenAI employees on how to bypass Apple’s exit security checks. The complaint also mentions that OpenAI advised departing employees not to disclose their next employer and taught them how to avoid the “dreaded walk‑out” – being immediately escorted out of the building – so they could retain the standard two‑week transition period and continue accessing Apple’s confidential information. OpenAI even instructed soon‑to‑leave Apple employees to notify OpenAI first if Apple HR “asks you to sign anything.” Even the supply chain was not spared. Apple alleges that OpenAI approached a partner firm that works with Apple on industrial design and had that firm perform a proprietary metal surface treatment process invented by Apple for OpenAI, while “misleading the partner into believing they had obtained Apple’s permission.”
3. 400 Employees Jump Ship – February Letter Went Unanswered
Behind this lawsuit lies a talent exodus that has lasted over a year. Apple provides a figure in the complaint: more than 400 former Apple employees now work at OpenAI. These individuals cover product design, displays, antennas, supply chain management, hardware procurement – nearly every role in a hardware development line is staffed. The Information’s exclusive sources revealed that as employees fled by the hundreds, Apple internally launched an emergency counter‑recruitment effort: salary increases, expanded responsibilities – whatever it took to retain people. The result, as the 400 figure shows, speaks for itself. Last month, the head of Apple’s Vision Pro and smart glasses business also jumped to OpenAI. Apple says it sent a letter to OpenAI in February expressing concerns about the flow of confidential information and asking what measures OpenAI planned to take to investigate. OpenAI’s response: no response. And so came the lawsuit.
Looking back, the deterioration of this relationship happened at breakneck speed. In 2024, ChatGPT was integrated into Apple Intelligence, allowing users to call up ChatGPT within Siri, generate text, and analyze screen content. The partnership later expanded to image generation in Image Playground. The turning point was OpenAI’s decision to build its own hardware. Poaching Ive, taking Tan, acquiring io – one move after another effectively set up a kitchen right on Apple’s doorstep. According to TF International Securities analyst Ming‑Chi Kuo’s analysis in April this year, OpenAI’s first device is likely to be a smartphone that does not rely on apps but operates through an AI agent. If true, this would be one of the most serious threats yet to Apple’s core hardware business. Additionally, according to the latest leaks, OpenAI’s upcoming AI hardware may also include a screen‑less smart speaker, glasses, a digital voice recorder, and a wearable Pin – all part of Sam Altman’s long‑standing obsession to create an AI assistant like the one in the movie Her. On the manufacturing side, Luxshare Precision has already secured assembly contracts for at least one device, and OpenAI has also approached Goertek – both old acquaintances in Apple’s supply chain. Apple, for its part, has not been idle; it is also pushing forward with a range of AI hardware including smart glasses, pendants, and AirPods with cameras. More subtly, OpenAI believes that Apple did not fulfill its obligation to promote ChatGPT under the 2024 agreement, and at one point considered sending Apple a notice of default. The Information confirmed in May, from OpenAI officials, that “legal action is being considered.” In other words, both sides were itching to sue each other – Apple just struck first.
4. On the Eve of IPO, a Lawsuit from the Sky
For OpenAI, the timing is particularly painful. OpenAI has confidentially filed IPO documents with regulators and is heading toward a blockbuster listing. Its first AI hardware is also imminent. Yet in the complaint, Apple directly brands OpenAI’s hardware business as “built on the shakiest of foundations, rotten to the core due to illegal reliance on stolen trade secrets.” Apple believes this is only the tip of the iceberg. Apple cannot see what OpenAI does behind closed doors, “where such misconduct has become normalized and is personally demonstrated by leadership.” Historical precedent suggests that such lawsuits can drag on for a long time. The most famous industry precedent is Google’s 2017 suit against Uber: autonomous driving star Anthony Levandowski downloaded files before jumping ship, and the case ultimately ended in a settlement. In 2019, Apple also sued former lead chip architect Gerard Williams, alleging that he planned to found a chip company, Nuvia, while still employed and poached colleagues on the side.
Incidentally, OpenAI’s legal department has been working around the clock lately. Two months ago, it won the high‑profile lawsuit brought by Elon Musk, with the jury ruling that he filed too late. Last month, a case brought by xAI against OpenAI for poaching and stealing secrets was also dismissed by a U.S. federal judge in California. On the other side, the lawsuit from hardware startup iyO is still ongoing – and Tang Tan is also named as a defendant there. Just this week, The New York Times and other publishers asked a judge to sanction OpenAI, alleging it withheld evidence in a copyright lawsuit. One can only say that tall trees catch much wind, but when OpenAI is sued so many times in a single year, it should probably look inward for some of the reasons.
