Apple sues OpenAI over trade secret theft by former employees as hardware race heats up

OpenAI is drowning in legal troubles. Beyond suits from Elon Musk, The New York Times, and others, the company now faces one of its most damaging accusations yet: Apple is claiming that former employees stolen years of proprietary hardware knowledge to benefit OpenAI's bid to build consumer devices.

Apple filed the complaint in Northern California federal court last Friday, naming three former staffers who made the jump to OpenAI: Tang Tan, a 24-year veteran who became OpenAI's chief hardware officer after the company acquired designer Jony Ive's startup io; Chang Liu, an iPhone systems engineer; and Yu-Ting "Alyssa" Peng. The 41-page filing claims these hires represent a coordinated pattern of intellectual property theft across the company's manufacturing and supply chain operations.

The allegations and their scope#

According to the complaint, Tan allegedly coached Apple employees on circumventing offboarding procedures and requested job candidates to bring Apple devices to OpenAI interviews. The suit also alleges a structured approach to extraction: hiring-stage recruitment, interview-based solicitation, and internal coordination to move sensitive information out of Apple.

Notably, Apple suggested in its filing that it has identified "a pattern of theft" extending far beyond the three named employees. The company stated the suit represents "the tip of the iceberg" and that OpenAI has systematically pulled talent and secrets from every level of its operations. Critically, OpenAI has not yet publicly unveiled any hardware product, making the practical impact of any stolen information unclear.

Why the timing cuts deep#

The lawsuit arrives at the worst possible moment for OpenAI. The company confidentially filed its IPO registration statement with the SEC last month and is under mounting pressure to demonstrate profitability. It has also recently shed numerous side projects to concentrate on core revenue streams, including its upcoming 2027 hardware launch—the result of a nearly $6.5 billion acquisition of io.

Hardware stands as the industry's next frontier, and OpenAI views it as essential as it faces questions about software-only profitability. But Apple, despite trailing in generative AI, remains the undisputed leader in consumer hardware design and manufacturing—a gap OpenAI tried to close by poaching talent. Now it faces years of costly litigation with a company known for tenacious defense of its intellectual property.