Apple Sues OpenAI for Trade Secret Theft, Escalating AI Hardware War to the Courtroom

The friction between Apple and OpenAI had been building since OpenAI announced its push into consumer hardware — punctuated by its $6.4 billion acquisition of io Products, the design studio co-founded by Apple's legendary former design chief Jony Ive. As former Apple insiders moved to OpenAI to build its hardware division, Apple alleges that confidential knowledge about unreleased products, supply chain partners, and proprietary manufacturing techniques traveled with them.

Background: From Partners to Courtroom Rivals

The relationship between Apple and OpenAI was once collaborative. Apple integrated ChatGPT into iOS 18, giving OpenAI access to hundreds of millions of iPhone users. But the mood shifted sharply when OpenAI signaled its ambitions to compete directly with Apple in physical devices — hiring former Apple hardware executives to lead the charge.

Apple's complaint states: "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 and confidential information."

Today, more than 400 former Apple employees work at OpenAI, making the talent pipeline between the two companies one of the largest in Silicon Valley.

The Accused: Tang Tan and Chang Liu

The lawsuit names two individuals directly responsible for the alleged misappropriation.

Tang Tan's alleged conduct centers on the interview process. According to the complaint, Tan instructed Apple employees applying to OpenAI to bring "actual parts" from Apple to interviews for "show and tell" sessions — a structured attempt to extract confidential product information from candidates still bound by Apple confidentiality agreements. He also allegedly circulated a "Need to Know" document teaching new OpenAI hires how to evade Apple's standard offboarding security checks.

Chang Liu spent eight years at Apple as a senior systems electrical engineer before leaving for OpenAI in 2026. Apple alleges he failed to return his company-issued laptop, and used it to download confidential Apple technical documents before his departure.

io Products and Jony Ive: The $6.4 Billion Shadow

The inclusion of io Products as a co-defendant underscores how central OpenAI's hardware ambitions are to this dispute. io Products was cofounded by Jony Ive, the designer behind the original iMac, iPod, iPhone, and Apple Watch — the very design language that defined Apple for a generation. OpenAI acquired the firm for $6.4 billion, positioning it as the studio to create OpenAI's first consumer AI devices.

Apple's complaint includes a particularly specific allegation: a proprietary metal finishing technique that OpenAI allegedly obtained and then used, misrepresenting to a manufacturing partner that it had Apple's permission to do so. Engadget reported that Apple's filing describes OpenAI's hardware operation as "rotten to its core."

What Apple Is Asking the Court to Do

Apple is seeking three forms of relief. First, a court order barring OpenAI from using or disclosing any of Apple's trade secrets. Second, the return of all confidential Apple materials in OpenAI's possession. Third, an order requiring OpenAI to preserve evidence related to the allegations.

OpenAI responded with a brief statement: "We have no interest in other companies' trade secrets. We remain focused on building innovative technology that empowers people everywhere."

Why This Matters for the AI Hardware Race

The lawsuit signals three broader shifts in the AI industry. First, the competitive frontier has moved from software benchmarks to physical devices. OpenAI's io Products ambitions, Meta's AR glasses, Google's Gemini-powered hardware, and Apple's own roadmap all converge on the same question: who will own the AI-native device. Second, the talent war between AI labs and established tech giants has acquired legal consequences — companies can no longer expect that mass hiring from a single competitor will go unchallenged. Third, the outcome of this suit could reshape how AI startups approach hardware-focused recruiting and the terms they set for new hires coming from Apple, Google, and other IP-intensive firms.

Whatever the court decides, this case marks a turning point where the AI hardware race moved from engineering labs into federal court.