Apple Sues OpenAI for Trade Secret Theft

Apple has filed a blockbuster lawsuit against OpenAI in federal court, accusing the AI company of stealing trade secrets to build its own consumer hardware. The complaint, filed on July 10 in Northern California, alleges the theft was systematic and happened “at every level” of OpenAI’s hardware division.

What Apple Is Alleging

At the centre of the case are two former Apple employees now at OpenAI. Tang Tan, OpenAI’s Chief Hardware Officer, previously served as an Apple vice president overseeing iPhone and Apple Watch product design. Apple claims Tan directed job candidates still working at Apple to bring “actual parts” to their OpenAI interviews for “show and tell” sessions, and emailed himself confidential supplier information before leaving.

The second defendant, Chang Liu, spent eight years as a senior systems engineer at Apple. According to the filing, Liu exploited a security vulnerability to download over a thousand pages of confidential engineering documents covering circuit board designs for unreleased Apple products. He also never returned his Apple-issued laptop.

The lawsuit also names io Products, the hardware design firm cofounded by former Apple design chief Jony Ive, which OpenAI acquired last year. Ive himself is not named as a defendant.

Why This Matters

This is a stunning reversal. In 2024, Apple and OpenAI announced a high-profile partnership that brought ChatGPT directly into the iPhone’s operating system. Now Apple is taking OpenAI to court, seeking damages and an injunction to stop the company from using its stolen intellectual property.

The timing is significant. OpenAI has been developing a consumer hardware device — widely expected to be unveiled later this year — and is preparing for what could be one of the largest tech IPOs in history. A trade secret case of this magnitude could complicate both plans.

Meanwhile, Apple has already been moving away from OpenAI. Earlier this year, Apple signed a deal with Google to power the next generation of Siri with Gemini, signalling that the ChatGPT partnership was winding down even before the lawsuit.

What This Means for You

If you use ChatGPT on your iPhone, nothing changes immediately. The existing integration still works. But this lawsuit signals that the future of AI on Apple devices runs through Google, not OpenAI. For anyone following the AI industry, it is a reminder that behind the product launches and partnerships, the competition for talent and technology is fierce — and sometimes crosses legal lines.