Apple Sues OpenAI for Alleged Theft of Hardware Trade Secrets

Apple has filed a lawsuit against OpenAI and its chief hardware officer, Tang Tan, alleging the theft of the iPhone maker’s trade secrets. The lawsuit, lodged in a US district court in San Jose, claims that OpenAI misappropriated confidential designs, unreleased parts, prototypes, and documents related to Apple’s stealth projects. This legal action marks a significant escalation in the increasingly competitive landscape of AI-powered consumer devices, despite the existing partnership between the two tech giants. The core of Apple's accusation centers on Tang Tan, who previously spent 24 years at Apple overseeing iPhone product design, and his colleagues at OpenAI. The lawsuit alleges that Tan and his team actively encouraged departing or prospective Apple employees to bring proprietary and unreleased technology with them. Furthermore, Tan is accused of coaching recruits on how to circumvent Apple’s robust data security protocols and even directing them to bring confidential Apple hardware parts to job interviews at OpenAI for 'show and tell' sessions. Apple asserts that OpenAI's nascent hardware business is 'rotten to its core by its illegal reliance on misappropriated trade secrets,' resorting to 'unlawful shortcuts' under pressure to deliver its first commercial hardware product. OpenAI, through its spokesperson Drew Pusateri, has denied the allegations, stating, 'We have no interest in other companies' trade secrets. We remain focused on building innovative technology that empowers people everywhere.' However, Apple spokesperson Hannah Smith reiterated the company's resolve, saying, 'We will always defend our teams' hard work and innovations, and we are taking all appropriate steps to do so.' This high-stakes legal battle over intellectual property theft is reminiscent of the 2017 Waymo-Uber dispute, which was settled for $245 million. The lawsuit highlights the fraying relationship between Apple and OpenAI, who became partners in 2024 to integrate ChatGPT into Apple devices. Despite this, Apple has increasingly turned to Google’s Gemini AI technology for its in-house AI models. The filing reveals that OpenAI has hired over 400 former Apple employees, including several veterans now leading OpenAI’s development of AI-powered consumer devices. Last year, OpenAI acquired io Products, a startup co-founded by long-time Apple executives including Tan, Scott Cannon, Evans Hankey, and famed designer Jony Ive, for $6.5 billion. io Products and Chang Liu, an electrical engineer at OpenAI and former Apple employee, are also named as defendants. Apple's investigation, which relied on data and messages from employee devices, uncovered several specific instances of alleged theft. For example, Chang Liu allegedly downloaded dozens of confidential hardware-related files, including a presentation on manufacturing complex circuit boards, and coached a recruit on how to 'avoid trouble with the security team' when copying files. Tang Tan is accused of emailing himself supplier information before leaving Apple and directing job candidates to bring 'actual parts' like batteries and logic boards to interviews. Another instance involved an Apple employee screenshotting confidential project files hours before an interview with Tan. Furthermore, Tan is accused of misusing an internal Apple document detailing security procedures for departing workers, allegedly using it to advise employees on how to evade security measures, prolong system access, and avoid signing exit documents. The lawsuit also alleges that OpenAI's io unit approached at least two of Apple's suppliers, with one supplier reportedly carrying out a 'specific trade secret metal-finishing technique for OpenAI' after being misled into believing Apple had approved the project. These allegations paint a picture of a systematic effort to leverage Apple's intellectual property for OpenAI's burgeoning hardware ambitions.