Apple sues OpenAI over alleged theft of iPhone hardware secrets

Apple has filed a federal lawsuit in the Northern District of California accusing OpenAI and several of its executives of misappropriating proprietary hardware designs and confidential documents belonging to the iPhone maker. The complaint, lodged on Friday, alleges that OpenAI’s chief hardware officer, Tang Tan, a former Apple employee of 24 years, recruited current Apple staff and encouraged them to bring unreleased components, schematics and internal files to OpenAI interviews, thereby violating Apple’s trade‑secret protections.

According to the filing, Tan and a team of former Apple engineers now working at OpenAI used their insider knowledge to accelerate OpenAI’s nascent hardware program. The suit claims that Tan coached prospective hires on how to bypass Apple’s security protocols, instructed them to bring physical parts such as batteries, logic boards and shielding to “show‑and‑tell” sessions, and supplied a confidential Apple internal guide that explains how departing employees can evade exit‑process checks. Apple says it identified these actions after an ex‑employee, electrical engineer Chang Liu, failed to return a company‑issued laptop and emailed a former colleague indicating continued access to Apple’s internal file‑sharing system. Liu allegedly downloaded dozens of confidential hardware files, including a presentation on the manufacturing and testing of complex circuit boards, and advised another Apple staffer on how to conceal the transfer of files before meeting with Tan.

The complaint also names OpenAI’s subsidiary io Products and the startup’s co‑founders—among them former Apple executives Scott Cannon, Evans Hankey and designer Jony Ive—as defendants. Apple alleges that io Products approached at least two of Apple’s suppliers, misleading them into believing Apple had authorized the work, and solicited detailed information about Apple’s metal‑finishing techniques and battery technology. One supplier reportedly performed a metal‑finishing process for OpenAI under the false impression that Apple had signed off, while another was queried about battery components in a manner that suggested OpenAI was trying to replicate Apple’s designs.

Apple’s legal team seeks a preliminary injunction to stop OpenAI from further using the alleged stolen information, monetary damages for the misappropriation, and the return of any proprietary parts or data. The company also claims that OpenAI’s hardware ambitions rest on “illegal shortcuts” and that the AI firm is “rotten to its core” because of its reliance on Apple’s confidential material.

OpenAI has responded that it has “no interest in other companies’ trade secrets” and that its focus remains on building innovative technology for users worldwide. The firm’s spokesperson, Drew Pusateri, reiterated that OpenAI is concentrating on its AI research and development, while refusing to comment on the specifics of the lawsuit. Tan has not provided a comment, and Liu did not respond to requests for comment.

The dispute marks a sharp escalation in a relationship that began in 2024 when Apple and OpenAI announced a partnership to bring ChatGPT to iPhones, Macs and iPads. Since then, Apple has increasingly turned to Google’s Gemini model for its own AI initiatives, while OpenAI has been quietly assembling a team of former Apple hardware experts to create AI‑powered consumer devices. Reports indicate that OpenAI plans to launch a tabletop AI “puck” that can be controlled by voice, with a commercial rollout not expected before April 2027. The lawsuit could delay or derail those product plans, especially as OpenAI prepares for a highly anticipated initial public offering later this year.

Legal analysts note that the case could become one of the most consequential intellectual‑property battles in Silicon Valley since Waymo sued Uber in 2017 over autonomous‑driving technology. That earlier case ended with Uber paying $245 million to settle. If Apple prevails, it could set a precedent for how aggressively tech firms protect hardware designs in an era where AI companies are rapidly expanding into physical products.

The broader industry implications are significant. As AI firms race to embed large language models into dedicated devices, the line between software innovation and hardware engineering is blurring. Companies with deep expertise in chip design, sensor integration and manufacturing—like Apple—are now vulnerable to talent poaching that could expose trade secrets. The outcome of Apple’s lawsuit may influence how future collaborations and employee transitions are managed, potentially prompting stricter exit‑process protocols and more vigilant monitoring of proprietary data.