Apple has filed a bombshell lawsuit against OpenAI, accusing the artificial intelligence company of building its hardware ambitions on a foundation of stolen trade secrets. The legal action, reported by Bloomberg, marks a dramatic escalation between two tech giants that had previously partnered to integrate ChatGPT into iPhones. Apple alleges that OpenAI, along with its hardware division io Products and former Apple employees, engaged in a coordinated effort to misappropriate confidential information related to product development, manufacturing, and supplier relationships.
The Lawsuit's Core Allegations
According to the complaint filed in a California court, Apple claims that OpenAI's expansion into physical devices—particularly the rumored AI-powered gadget being developed with former Apple designer Jony Ive—was guided by knowledge taken from Apple's internal design and engineering processes. The lawsuit names three main defendants: OpenAI, io Products (the hardware startup founded by Jony Ive and later acquired by OpenAI), and two former Apple employees—Tang Tan and Chang Liu.
Tang Tan, who previously served as Apple's vice president of Hardware Engineering and played key roles in developing products like the iPhone and Apple Watch, is now the chief hardware officer at OpenAI. Apple alleges that Tan encouraged job applicants to bring Apple components or proprietary information to interviews, effectively using his position to funnel sensitive data into OpenAI's hardware division. Chang Liu, a former electrical engineer at Apple who joined OpenAI earlier this year, is accused of keeping confidential Apple files after his departure and accessing unauthorized engineering data.
Apple's legal team argues that the alleged theft was not an isolated incident but part of a calculated strategy. The company claims that OpenAI sought to shortcut years of research and development by leveraging Apple's proprietary methods, including detailed specifications of unannounced products, supplier contracts, and manufacturing techniques. This information, Apple asserts, would give OpenAI an unfair advantage in the rapidly evolving AI hardware race.
The Jony Ive Connection
Central to the dispute is OpenAI's acquisition of io Products, the hardware startup founded by Jony Ive after he left Apple in 2019. Ive, widely celebrated for his iconic designs of the iPhone, iPad, and Apple Watch, had been working with OpenAI CEO Sam Altman on a new category of AI devices. The company's hardware ambitions have been an open secret in tech circles, with rumors swirling about a handheld AI assistant that could challenge both smartphones and existing wearable devices.
Apple's lawsuit claims that OpenAI's collaboration with Ive was not conducted independently but rather built upon trade secrets acquired through former Apple employees. The company argues that Ive's io Products team, now fully integrated into OpenAI, would have had no legitimate access to Apple's latest hardware blueprints without the alleged misconduct. Apple is seeking damages and an injunction to prevent OpenAI from using or profiting from the allegedly misappropriated information, as well as demanding the return or destruction of any confidential materials still in the defendants' possession.
Background: A Partnership Turned Sour
Apple and OpenAI had previously maintained a cooperative relationship, culminating in a two-year-old partnership to bring ChatGPT capabilities to Apple's iOS ecosystem. That deal allowed iPhone users to access OpenAI's chatbot directly through Siri or system-level integration, giving Apple a competitive edge in AI-powered features. However, the relationship began to fray as OpenAI aggressively expanded into hardware, entering territory Apple had long dominated.
Silicon Valley has often seen former employees move between companies, but Apple is known for its aggressive protection of intellectual property. The company has a history of filing lawsuits against former workers and competitors over trade secret theft, including high-profile cases against chip startup Rivos and battery supplier A123 Systems. This new lawsuit against OpenAI is among the most significant, given the defendants' stature and the potential implications for the future of AI hardware.
OpenAI's pivot to hardware was a natural progression for the company, which had already developed powerful AI models and sought to create devices that could leverage them in real-time. Altman had discussed the need for a dedicated AI device that could operate independently of smartphones, and Ive's industrial design expertise seemed the perfect fit. But Apple's lawsuit suggests that OpenAI may have borrowed more than inspiration from its former employees.
Tang Tan's Role at Apple
Tang Tan was a key figure in Apple's hardware engineering group during his 15-year tenure. He oversaw the development of several critical components, including the iPhone's chassis design, the Apple Watch's sensors, and the MacBook's internal layout. Known for his meticulous attention to detail and deep knowledge of supply chain operations, Tan was seen as a rising star within Apple. His departure in early 2025 to join OpenAI as chief hardware officer sent shockwaves through the company, as he was one of the few executives with comprehensive access to Apple's product roadmap.
Apple's lawsuit details specific instances where Tan allegedly used his role at OpenAI to solicit confidential information. For example, the complaint claims that during job interviews with potential hires from Apple, Tan would ask them to bring physical components or unredacted technical documents. In one instance, a candidate reportedly showed Tan a prototype of a next-generation Apple charger during an interview, which was then photographed and discussed in detail. OpenAI denies that such actions were sanctioned by the company, but Apple argues that the culture of secrecy was encouraged from the top.
Chang Liu and the Engineering Data
Chang Liu, an electrical engineer who worked on Apple's power management and circuit design teams, allegedly downloaded hundreds of confidential files in the weeks before his resignation. Apple claims that Liu copied data related to battery optimization, wireless charging, and energy-efficient silicon design—all critical to building a compact AI device with long battery life. After joining OpenAI in early 2026, Liu is accused of accessing these files multiple times, using a personal laptop that bypassed Apple's security controls.
Apple's security logs show that Liu accessed a proprietary engineering database without authorization after his employment ended. The company reported the incident to federal authorities, who are now conducting a parallel investigation. While civil lawsuits often focus on monetary damages, Apple is also seeking criminal referral for the most egregious aspects of the alleged theft. OpenAI has not commented on the specific allegations against Liu, but the company has maintained that it strictly adheres to intellectual property laws.
Legal Experts Weigh In
Intellectual property attorneys following the case note that Apple faces a high bar to prove trade secret misappropriation. The company must demonstrate that the information was indeed confidential, that OpenAI had a duty to protect it, and that it was used to the detriment of Apple. However, the evidence presented in the complaint—including email communications, interview testimonials, and forensic data logs—could be compelling. If Apple succeeds, it could set a precedent for how companies handle former employees' access to proprietary knowledge.
Some legal analysts argue that the case also highlights the tension between innovation and employee mobility. Tech companies often rely on moving talent to gain fresh perspectives, but Apple's lawsuit suggests that OpenAI may have crossed a line by actively soliciting trade secrets. The outcome could influence how startups recruit from established giants, especially in the fiercely competitive AI sector.
Impact on the AI Hardware Race
The lawsuit comes at a pivotal moment for AI hardware. Companies like Meta, Google, and Amazon are all investing heavily in custom chips and devices designed to run AI models locally, reducing reliance on cloud servers. OpenAI's device, if it ever materializes, could compete directly with Apple's rumored mixed-reality headset and next-generation iPhone. By accusing OpenAI of stealing secrets, Apple is essentially trying to slow down a rival's hardware development cycle.
Whichever side prevails, the case will likely delay OpenAI's hardware plans. An injunction could prevent the company from using any of the disputed technology, potentially forcing a redesign of its device. Conversely, if Apple's claims are dismissed, OpenAI would gain a PR boost and could move forward with its product. The legal battle also exposes the fragility of partnerships in the tech world, where collaboration can quickly turn into confrontation when intellectual property is at stake.
As of this writing, OpenAI has not publicly responded to the allegations. The company's legal team is expected to file a motion to dismiss or deny the claims in the coming weeks. Meanwhile, Apple's shareholders are watching closely, as the lawsuit could affect the company's market position and future collaborations with AI firms. The case serves as a stark reminder that in the race to build smarter machines, the battle is not only about algorithms but also about the secrets behind the hardware that powers them.
Source: Android Authority News