Apple Sues OpenAI, Alleging Former Employees Stole Confidential Hardware Trade Secrets

In a significant legal development, Apple has initiated a lawsuit against OpenAI, alleging that the artificial intelligence company, along with two former Apple employees, misappropriated confidential hardware information. This move underscores the competitive landscape in the technology sector, particularly as companies vie for dominance in the emerging consumer hardware market driven by AI advancements.

The lawsuit was filed in the U.S. District Court for the Northern District of California and names several defendants, including OpenAI, io Products, and two former Apple employees: Tang Tan and Chang Liu. Apple accuses this group of engaging in a systematic pattern of theft, which allegedly involved confidential information concerning unreleased products, engineering processes, manufacturing techniques, and proprietary hardware development.

According to reports, Apple initially raised concerns regarding this alleged misconduct with OpenAI in February, requesting an internal investigation. However, Apple claims it did not receive a response, prompting the legal action. The lawsuit details how former employees purportedly downloaded sensitive engineering documents, manufacturing specifications, and proprietary project files either before or shortly after their departures from Apple. Furthermore, Apple alleges that some of these employees attempted to circumvent internal security measures designed to protect sensitive information.

Apple's complaint emphasizes that the case revolves around the theft of trade secrets for the benefit of OpenAI. The company asserts that this behavior is merely "the tip of the iceberg," suggesting a broader pattern of misconduct involving other former employees who transitioned to OpenAI.

Key Individuals Involved

Among the notable defendants is Tang Tan, who served as Apple’s Vice President of Product Design and played a crucial role in overseeing the hardware development of the iPhone and Apple Watch. Tan left Apple in 2024 to join io Products, a hardware startup founded by former Apple Chief Design Officer Jony Ive. OpenAI later acquired io Products in a deal reportedly worth $6.5 billion in 2025, integrating Tan and over 50 engineers into its workforce.

Chang Liu, another defendant, worked as a senior systems electrical engineer at Apple for eight years before joining OpenAI earlier this year. Apple alleges that Liu continued to access Apple’s internal systems after his departure by exploiting a security vulnerability, downloading confidential hardware files that contained engineering presentations, manufacturing documentation, and technical specifications. Furthermore, Apple claims Liu guided another employee on how to copy confidential files while evading detection prior to his exit.

The lawsuit also outlines allegations that OpenAI recruiters, including Tan, encouraged Apple employees interviewing for positions at OpenAI to bring along confidential hardware components, prototypes, and other proprietary materials. The complaint states that Tan allegedly questioned candidates using internal Apple project codenames and requested “actual parts” during interviews, aiming to extract additional information about unreleased Apple products.

Additionally, Apple asserts that OpenAI utilized confidential supplier information to approach Apple’s long-standing manufacturing partners, seeking work involving proprietary production techniques without Apple’s authorization. The lawsuit notes that over 400 former Apple employees are now part of OpenAI, although only Tan and Liu are named as defendants in this case.

Implications for the Tech Industry

The implications of this lawsuit extend beyond the immediate parties involved. As OpenAI continues to develop its first generation of consumer hardware products following its acquisition of io Products, this legal action highlights the fierce competition in the tech industry surrounding the development of next-generation AI devices. The proprietary technology that underpins these advancements is of immense value, making the protection of trade secrets increasingly critical.

Apple is seeking both damages and injunctive relief to prevent any ongoing use of its alleged trade secrets, arguing that the confidential information constitutes the foundation of OpenAI’s emerging hardware business. This lawsuit also follows earlier legal disputes related to OpenAI’s hardware initiatives, including trade secret allegations from another hardware startup, iyO, earlier this year.

As the case moves through the legal system, both companies will have the opportunity to defend their positions. The outcome could set significant precedents regarding the protection of intellectual property in the rapidly evolving landscape of AI and consumer technology. For now, the allegations remain unproven, but they underscore the critical importance of safeguarding proprietary information in an increasingly competitive market.