Apple Sues OpenAI for Theft of Trade Secrets

Apple filed a lawsuit against OpenAI on Friday, alleging theft of trade secrets and breach of contract. The lawsuit, filed in the federal court for the Northern District of California, is not just a legal dispute between two giants. It is the clearest signal yet that the race for artificial intelligence hardware is turning into an open war.

At the center of the allegations is Tang Tan, the current hardware director at OpenAI, who spent 24 years at Apple. Before switching sides, Tan held the position of vice president of product design for iPhone and Apple Watch. Apple claims that he used confidential codenames for internal projects during the recruitment process at OpenAI, asked candidates to bring Apple hardware components to interviews, and advised departing employees on how to circumvent the company's security procedures.

The lawsuit goes beyond Tan. It also cites Chang Liu, who worked for eight years at Apple as a senior systems electrical engineer. According to the Cupertino company, Liu did not return a corporate laptop after leaving for OpenAI in 2026 and used the equipment to download confidential technical documents.

These documents included, according to Apple, information about technologies, features, and products that have not yet been announced. Technical specifications, engineering presentations, and proprietary project data are part of the material that was allegedly extracted. Liu is also accused of sharing confidential information with other Apple employees who were applying for positions at OpenAI, even advising at least one of them on what to study before the interview.

Apple's investigation also revealed that OpenAI and its partners may have used confidential information in the development of their own hardware product. One example cited in the lawsuit involves a proprietary metal finishing technique: OpenAI allegedly misled a partner by suggesting that it had permission from Apple to use the process.

The allegations gain weight when placed in the context of OpenAI's ambitions beyond software. As we have followed in our technology coverage, Sam Altman's company has been signaling for months that it intends to launch its first physical device.

In April, analyst Ming-Chi Kuo suggested that this device could be a smartphone based on AI agents, replacing the traditional app model. If confirmed, it would be one of the biggest threats to Apple's core business, which relies on the iPhone ecosystem to generate service revenue, currently its fastest-growing vertical.

Another relevant fact: OpenAI acquired last year io, a hardware startup founded by Jony Ive, former chief designer at Apple, in a $6.5 billion deal. Interestingly, Ive is not mentioned in the lawsuit, but io is. The combination of talent coming from Apple, the acquisition of a company founded by the most iconic designer in the company's history, and now allegations of theft of trade secrets paints a decidedly uncomfortable picture for OpenAI.

The Apple vs. OpenAI case does not exist in a vacuum. The technology industry is experiencing a moment of increasing tension around intellectual property and human talent. The competition for qualified AI professionals has inflated salaries and created a market where the line between recruiting talent and extracting proprietary knowledge has become dangerously thin.

Apple claims it sent a letter to OpenAI in February raising its concerns and received no response. This silence, combined with the volume of allegations, suggests that Apple waited to accumulate enough evidence before proceeding with litigation. In the lawsuit, the company asks the court to prohibit OpenAI from using or disclosing its trade secrets, require the return of any confidential material, and order the preservation of evidence.

The language of the lawsuit is aggressive. "This is the tip of the iceberg," the document states. "OpenAI's nascent hardware business now rests on the most fragile foundations, rotten at its core due to illegal dependence on stolen trade secrets."

For investors and industry observers, the case raises practical questions. If Apple wins, OpenAI's hardware project could face significant delays or need to be redesigned from scratch, jeopardizing Altman's strategy to create a device capable of competing with the iPhone. The war for talent among big tech companies is also likely to intensify, with firms tightening non-compete clauses and internal security mechanisms.

On Apple's side, the move is defensive but also strategic. By taking the case to court, the company gains access to the discovery process, which could reveal the true extent of the alleged operation. It is a way to map out what OpenAI knows, what it used, and potentially curb competition before it reaches the market.

The case also sheds light on a paradox of the current technology moment. The world's most valuable AI companies have been built on software, but now they need hardware to distribute their products directly to consumers. And the fastest way to build that capability is to hire those who already know how to do it. The problem arises when hiring turns into extracting.

Apple made its position clear in a statement: "We will always defend the hard work and innovations of our teams, and we are taking all appropriate measures to do so." OpenAI has not yet publicly commented on the lawsuit.

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