Apple Takes Legal Action Against OpenAI Over Alleged Trade Secret Theft
Apple has launched a major legal challenge against OpenAI, accusing the artificial intelligence company and two former Apple employees of misappropriating confidential information to support OpenAI’s expansion into consumer hardware.
The lawsuit, filed on Friday, July 10, 2026, in the U.S. District Court for the Northern District of California, includes claims of trade secret misappropriation and breach of intellectual property agreements. Alongside OpenAI, the defendants include its Chief Hardware Officer Tang Yew Tan, technical staff member Chang Liu and hardware business io Products. The allegations have not yet been tested or proven in court.
Apple Alleges a Wider Pattern of Misconduct
Apple argues that the case involves more than the actions of individual former employees. According to the complaint, the alleged misconduct formed part of a coordinated effort to obtain knowledge about Apple’s unreleased products, engineering processes, manufacturing methods and supplier relationships.
The company claims OpenAI’s senior leadership was involved, including Tang Tan, who spent 24 years at Apple and most recently served as Vice President of Product Design for the iPhone and Apple Watch. Tan is now OpenAI’s Chief Hardware Officer.
Apple alleges that Tan used confidential Apple project code names while interviewing Apple employees for positions at OpenAI. He is also accused of asking candidates about unannounced products and directing them to bring Apple hardware components to interviews for what the complaint describes as “show and tell” sessions.
The filing further claims that candidates were encouraged to bring “CAD/design artifacts” and “prototypes” and to discuss matters such as component selection, system integration tools and relationships with vendors. Apple says at least one candidate expressed surprise at being asked to remove physical components from the company’s offices.
OpenAI’s Consumer Hardware Plans Raise the Stakes
The dispute comes as OpenAI increases its investment in physical consumer products, potentially placing it in more direct competition with Apple.
In April, industry analyst Ming-Chi Kuo suggested that OpenAI could be developing a smartphone based around AI agents rather than traditional apps. Such a device could allow OpenAI to control its own hardware and operating environment instead of relying on the platforms managed by Apple and Google.
OpenAI significantly strengthened its hardware capabilities after acquiring io, the device startup associated with Apple’s former design chief Jony Ive. The transaction was announced at approximately $6.5 billion. Although io Products is named as a defendant in Apple’s filing, Ive himself is not named.
The complaint says Tan and other former senior Apple executives co-founded io Products in 2024 as a dedicated hardware operation. OpenAI announced the acquisition in May 2025 before combining the io team with its wider organisation.
Former Engineer Accused of Retaining Apple Equipment
Apple’s complaint also contains detailed allegations against Chang Liu, who worked at Apple for eight years as a senior systems electrical engineer before joining OpenAI in 2026.
According to Apple, Liu did not return at least one company-issued computer when he left. The company claims he later discovered that the device could still access Apple’s internal network because of a previously unknown authentication vulnerability.
Rather than alerting Apple, Liu allegedly used the access to download dozens of confidential hardware-related files. Apple says the documents contained information about unreleased products, engineering presentations, technical specifications and proprietary project data. The company states that it fixed the vulnerability after discovering it.
Liu is also accused of sharing confidential information with an Apple employee who was applying to work at OpenAI. Apple alleges that he advised the employee on which confidential subjects to study before the interview and how to “avoid trouble with the security team” when accessing or copying files.
Confidential Processes Allegedly Shared With Business Partners
Apple claims the alleged use of its intellectual property extended beyond recruitment and internal documents.
One example in the complaint concerns a proprietary metal-finishing process. Apple alleges that OpenAI or io asked one of Apple’s trusted partners to perform the technique for OpenAI’s benefit while misleading the partner into believing that Apple had approved the work.
The iPhone maker says its investigation has involved reviewing communications on company-owned devices and analysing internal server records. However, Apple argues that it currently has limited visibility into activity inside OpenAI and will need the legal discovery process to establish the full scale of the alleged conduct.
Apple also says it contacted OpenAI in February to raise concerns about the possible movement of confidential information into OpenAI’s business. According to the complaint, OpenAI did not respond.
Apple Seeks an Injunction and the Return of Materials
Through the lawsuit, Apple is asking the court to prevent OpenAI and the other defendants from using or revealing its trade secrets. It also wants the defendants to return confidential materials and preserve evidence connected to the allegations.
The complaint presents Apple’s accusations in unusually strong language:
“This is the tip of the iceberg. Apple lacks visibility into what’s been happening behind closed doors at OpenAI, where such misconduct is normalized and exemplified by leadership,” the filing states. “As a natural result, OpenAI’s nascent hardware business now rests on the shakiest of foundations, rotten to its core by its illegal reliance on misappropriated trade secrets.”
Apple’s filing demands a jury trial and seeks injunctive relief alongside other damages and remedies that may be determined by the court.
Apple Promises to Defend Its Intellectual Property
In a prepared statement, Apple emphasised the importance of protecting the work of its engineering and product teams:
“At Apple, our teams are constantly developing breakthrough technologies to create the best products and services in the world, and protecting their work and intellectual property is something we take very seriously. Recently, significant evidence has emerged suggesting individuals employed by OpenAI wrongfully took Apple’s secret and confidential information regarding our unreleased technologies, processes, and products. We will always defend our teams’ hard work and innovations, and we are taking all appropriate steps to do so.”
OpenAI Rejects Apple’s Allegations
OpenAI has denied having any interest in obtaining competitors’ confidential information. In its public response, the company said:
“We have no interest in other companies’ trade secrets. We remain focused on building innovative technology that empowers people everywhere.”
The case represents a significant deterioration in the relationship between the two technology companies, which previously worked together to integrate ChatGPT into Apple Intelligence. Apple’s complaint notes that the existing commercial agreement covering that integration is not part of the lawsuit.
A Potentially Important Case for the Technology Industry
The dispute highlights the growing value of engineering talent and proprietary knowledge as leading AI companies move beyond software and into hardware.
Its outcome could influence how technology businesses recruit employees from competitors, manage confidential information during interviews and handle intellectual property when experienced engineers move between companies.
For now, Apple’s claims remain allegations. OpenAI and the individual defendants will have an opportunity to respond through the court process, while legal discovery could reveal additional information about OpenAI’s recruitment practices and developing hardware operations.
Online References
- Apple Inc. v. Chang Liu, Tang Yew Tan, OpenAI and io Products — federal court complaint.
- Reuters coverage of Apple’s lawsuit and OpenAI’s response.
- Associated Press report on the allegations and defendants.
- TechCrunch reporting on OpenAI’s hardware plans and io acquisition.
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