Apple Takes OpenAI to Court Over Alleged Theft of Hardware Trade Secrets by Former Staff

In brief

• Apple has initiated legal proceedings against OpenAI and two ex-employees, accusing them of misappropriating hardware trade secrets.
• The filing asserts that former Apple staff improperly accessed confidential documents, disclosed supplier data, and leveraged internal knowledge at OpenAI.
• The action comes after OpenAI’s $6.4 billion purchase of io Products, a hardware venture founded by ex-Apple designer Jony Ive.

Apple has filed suit against OpenAI and two of its former employees, alleging that the ChatGPT developer exploited stolen trade secrets to advance its consumer hardware initiatives.

The complaint, submitted Friday to the U.S. District Court for the Northern District of California, identifies ex-Apple senior systems electrical engineer Chang Liu and former iPhone and Apple Watch design executive Tang Yew Tan as defendants, alongside the OpenAI Foundation, OpenAI Group PBC, and io Products.

According to Apple, Liu—who departed after eight years in January—failed to return a company-issued laptop and subsequently gained unauthorized entry to Apple’s internal networks by exploiting an authentication flaw.

Apple’s attorneys stated in the complaint: “While employed by OpenAI, Mr. Liu also exploited a rare, previously unknown authentication bug to access Apple’s shared network folders. Upon discovering that he had this unauthorized access to Apple’s systems, Mr. Liu did not report it, return his stolen Apple-issued work laptop, or delete the program that allowed the access.”

Apple further contends that Liu downloaded numerous confidential hardware documents, encompassing details on unreleased products, engineering briefings, technical specs, and proprietary project material.

The tech giant also accuses Tan—who spent 24 years at Apple before assuming the role of OpenAI’s chief hardware officer—of leveraging confidential insights from his tenure to aid OpenAI.

The suit asserts that Tan referenced Apple’s internal code names during OpenAI recruitment interviews and inquired about unreleased devices. Apple additionally alleges that job candidates were instructed to bring physical components for demonstration purposes.

Apple further maintains that OpenAI’s hiring process solicited CAD and design files, prototypes, supply-chain data, and specifics regarding applicants’ prior hardware work at Apple.

Neither Apple nor OpenAI promptly replied to a request for comment from Decrypt.

The litigation arrives on the heels of OpenAI’s $6.4 billion acquisition of io Products, a hardware firm launched by ex-Apple designer Jony Ive, who is not cited as a defendant.

Per the filing, OpenAI’s hardware unit has onboarded over 400 ex-Apple staff. Apple says it alerted OpenAI in February about suspicions that proprietary information was migrating to the company, yet received no reply.

This development follows a distinct trade-secret clash between OpenAI and Elon Musk’s xAI. Last September, xAI filed suit claiming OpenAI poached ex-staff to acquire confidential source code, training techniques, and data-center plans.

OpenAI rejected the claims, and a federal judge dismissed the case in June, ruling that xAI failed to demonstrate OpenAI had incentivized any former worker to leak confidential data.

The current lawsuit marks a sharp reversal from the previously cooperative rapport between Apple and OpenAI.

In 2024, Apple partnered with OpenAI to integrate ChatGPT into Siri under its Apple Intelligence program. Yet earlier this year, amid setbacks, Apple shifted to Google’s Gemini to drive its next-gen AI models.

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