Apple Sues OpenAI for Trade Secret Theft in Escalating Tech Feud

Apple has filed a lawsuit against OpenAI, its hardware subsidiary io Products, and two former Apple employees, alleging a coordinated scheme to steal trade secrets and confidential information. The complaint, filed July 10 in the U.S. District Court for the Northern District of California, accuses OpenAI of systematically extracting proprietary knowledge about unreleased hardware technologies, manufacturing processes, and supplier relationships to accelerate its push into consumer hardware.

According to 9to5Mac, Apple’s filing states that “over 400 former Apple employees” now work at OpenAI, and the company alleges that “at every level, from members of its Technical Staff to its Chief Hardware Officer, and in coordination with business partners, OpenAI has been stealing Apple’s trade secrets.”

The Allegations

The lawsuit names Tang Yew Tan, OpenAI’s Chief Hardware Officer and former Apple VP of Product Design, and Chang Liu, a former Apple senior system electrical engineer, as individual defendants. Apple’s complaint details multiple forms of alleged misconduct.

Interview-Based Information Extraction

Apple alleges that Tan used insider knowledge of Apple’s confidential projects during job interviews with Apple employees. According to the complaint, Tan would use Apple internal project codenames to ask “What’s the plan?” for unannounced Apple products. He allegedly directed candidates still working at Apple to bring “actual parts” from Apple to interviews for “show and tell” sessions, as The Guardian reported.

One candidate began “screenshotting and downloading files relating to a highly confidential Apple project” hours before interviewing with Tan, who then “solicited more information about that same Apple project” during the interview. Apple says this became an “established pattern.”

Post-Employment Security Breach

Chang Liu allegedly exploited an authentication bug to access Apple’s internal network after his departure, downloading confidential hardware-related files. Rather than reporting the security flaw, Liu joked about it in messages (“LOL,” “so funny”). He also failed to return an Apple-issued laptop. Apple claims Liu downloaded a “compilation of technical files with over a thousand pages” including detailed manufacturing documents for Apple circuit boards.

Supplier Poaching

Perhaps most significantly, Apple alleges that OpenAI had a trusted Apple partner carry out Apple’s proprietary metal-finishing technique, misleading the partner into believing it had Apple’s permission. OpenAI also approached a second longtime Apple supplier working on power and battery manufacturing, using insider terminology to ask “targeted questions” about specific Apple components.

OpenAI’s Response

OpenAI responded swiftly via X (Twitter). Drew Pusateri, Director of Strategic Communications, wrote: “We have no interest in other companies’ trade secrets. We remain focused on building innovative technology that empowers people everywhere,” as 9to5Mac reported.

A Partnership Turned Sour

The lawsuit marks a dramatic reversal for the two tech giants, who announced a landmark partnership in 2024 to integrate ChatGPT into Apple’s operating systems. At the time, the deal was seen as Apple’s strategic move to catch up in artificial intelligence.

However, the relationship has deteriorated significantly. At WWDC in June 2026, Apple showcased its revamped Siri powered by Google’s Gemini AI model rather than ChatGPT — a clear signal of the shift. Bloomberg reported in May 2026 that OpenAI was preparing “legal action” against Apple over how the Siri-ChatGPT partnership played out.

OpenAI’s Hardware Ambitions

The lawsuit directly targets OpenAI’s ability to develop consumer hardware. In May 2025, OpenAI acquired io Products, the hardware startup founded by former Apple design legend Jony Ive, for $6.5 billion. The acquisition brought Ive, Evans Hankey, Scott Cannon, and Tang Tan — along with over 50 engineers — into OpenAI.

OpenAI is reportedly developing multiple hardware products, including a smartphone (potentially launching in 2028, per analyst Ming-Chi Kuo), a HomePod-style smart speaker, and a “macropad” for its Codex platform. In late June 2026, OpenAI announced it would reveal hardware in approximately two weeks.

Legal and Industry Implications

This lawsuit represents one of the most significant trade secret disputes in the tech industry, pitting two of the world’s most valuable companies against each other. The case is filed under the Defend Trade Secrets Act (DTSA), which allows for federal jurisdiction and potentially significant damages, including exemplary damages for willful and malicious misappropriation.

Apple says it first raised concerns with OpenAI directly in February 2026, asking the company to investigate. OpenAI never responded, which could strengthen Apple’s case for willful misconduct.

Apple is represented by Weil, Gotshal & Manges LLP, as noted by Law360. The company is seeking injunctive relief — a court order blocking OpenAI from using Apple’s trade secrets — and monetary damages.

This is not OpenAI’s first legal entanglement over trade secrets. Hardware startup iyO initially sued OpenAI and io Products over branding in 2025, then amended its complaint in March 2026 to add trade secret misappropriation allegations, also naming Tang Tan. OpenAI also faces lawsuits from The New York Times and other publishers over copyright infringement, as well as multiple class actions from authors.

What’s Next

The case raises several critical questions. Can OpenAI be held responsible for the actions of individual employees during the hiring process? Will OpenAI countersue Apple over the Siri partnership, as Bloomberg reported it was preparing to do? And how will the parallel iyO lawsuit affect this case?

Apple’s complaint states that the current allegations are “the tip of the iceberg,” suggesting more revelations may follow. As the legal battle unfolds, the outcome could set important precedents for how tech companies handle employee mobility and trade secret protection — with implications that extend far beyond Cupertino and San Francisco.