Apple Sues OpenAI Over Alleged Theft of Hardware Trade Secrets

Apple has filed a lawsuit against OpenAI and the company's chief hardware officer, alleging systematic theft of proprietary technology including unreleased components, prototype designs, and confidential documents about secret projects. The case marks a significant escalation in competitive tensions between the two firms and recalls Silicon Valley's most dramatic IP battles.

The Allegations#

The complaint centers on Tang Tan, OpenAI's hardware lead who spent two decades at Apple designing iPhone products. According to Apple's filing, Tan and colleagues allegedly encouraged departing Apple staff to smuggle out proprietary technology and coached them on bypassing the company's security systems. The lawsuit describes a pattern in which OpenAI recruits were instructed to bring physical Apple components—batteries, circuit boards, and protective shields—to job interviews for demonstration purposes.

One recent employee, electrical engineer Chang Liu, allegedly downloaded dozens of confidential hardware files before leaving, including manufacturing and testing specifications for complex circuitry. Apple discovered the breach after Liu failed to return his laptop and mentioned in writing that he retained access to Apple's internal file-sharing system.

According to the filing, Tan himself emailed supplier information to his personal accounts before departing. The lawsuit further alleges that Apple's own security handbook for exit procedures—which Tan possessed—was weaponized by OpenAI recruiters to advise employees on evading detection during their transition.

Pressure to Deliver#

Apple characterizes OpenAI's conduct as "taking unlawful shortcuts" under pressure to launch its first commercial hardware product. The company claims the AI firm approached at least two of Apple's suppliers, including one battery manufacturer, with targeted questions designed to extract proprietary knowledge.

The Business Context#

Apple and OpenAI were announced as partners in 2024, striking a high-profile deal to integrate ChatGPT into iPhones, Macbooks, and iPads. However, the partnership has since deteriorated, with Apple increasingly turning to Google's Gemini for its internal AI systems.

The two companies are expected to compete fiercely in the emerging AI-powered consumer device market. OpenAI has recruited over 400 former Apple workers, and last year acquired a startup called io Products—cofounded by Tan, Jony Ive, and other Apple veterans—for $6.5 billion. The company plans to and is reportedly developing a voice-controlled tabletop AI device.