Apple filed a lawsuit against OpenAI on 10 July in the US District Court for the Northern District of California, alleging the AI company stole trade secrets related to the iPhone, Apple Watch and MacBook to accelerate development of its own consumer hardware. The complaint names OpenAI, io Products — the hardware startup founded by Jony Ive that OpenAI acquired in 2025 — and two former Apple employees: Tang Yew Tan, OpenAI's chief hardware officer and a 24-year Apple veteran, and Chang Liu, a senior electrical engineer who spent eight years at the company.
The filing is extraordinary in its detail and its language. Apple describes OpenAI's nascent hardware business as "rotten to its core" and alleges "a coordinated pattern of misconduct at an institutional level." More than 400 former Apple employees now work at OpenAI, according to the complaint.
At the centre of the case is an allegation that reads like a corporate espionage thriller. Apple says Liu discovered, weeks after leaving for OpenAI, that a "rare" bug still allowed him to access Apple's internal file servers. Rather than report it, Apple alleges, he exploited the bug to download confidential files and coached a colleague still inside Apple on how to copy materials without triggering the security team. He reportedly sent a message to that employee which read, "LOL, I found out I can access."
Apple alleges the misconduct went further. Tan, who Apple portrays as orchestrating the effort to obtain confidential information, is accused of asking job candidates to bring physical Apple components to "show and tell" sessions during interviews at OpenAI. The complaint alleges he used an internal Apple document to create a checklist to help departing employees evade Apple's departure security measures. Apple also alleges OpenAI used stolen proprietary information to approach Apple's manufacturing partners — including asking one partner to demonstrate Apple's technique for finishing metal on its devices.
A spokesperson for Apple said: "Recently, significant evidence has emerged suggesting individuals employed by OpenAI wrongfully took Apple's secret and confidential information regarding our unreleased technologies, processes, and products." The company says it began investigating after discovering the security bug and sent a letter to OpenAI in February raising its concerns. Apple is seeking injunctive relief, damages, and an order requiring OpenAI to destroy any stolen material in its possession.
OpenAI has denied the allegations. Drew Pusateri, the company's director of strategic communications, wrote on X: "We have no interest in other companies' trade secrets. We remain focused on building innovative technology that empowers people everywhere." The company says it is reviewing the court filing. None of Apple's allegations have been proven in court.
The lawsuit marks a dramatic rupture in a partnership only two years old. In 2024, Apple integrated ChatGPT into the iPhone's operating system in a deal that was widely seen as a strategic alliance. But Apple's concerns about OpenAI's hardware ambitions had been mounting, according to The Information, which reported that the "seemingly never-ending stream of Apple employees jumping ship to join the AI startup" had alarmed the iPhone maker for months. OpenAI acquired Ive's io Products for approximately $6.5 billion in 2025, and Sam Altman said in November that the company had finished its first hardware prototypes.
The case also carries echoes of Apple's own past. Business Insider noted that in 2020, medical device company Masimo sued Apple, alleging that Apple first explored a partnership before hiring away several of its top executives and engineers, then used confidential know-how to develop the blood oxygen features on the Apple Watch. Apple settled that case. Whether the pattern repeats here — or whether OpenAI's denials hold up under discovery — is now a question for the court.
Bloomberg's Mark Gurman has reported that the lawsuit is already damaging OpenAI's hardware ambitions, even before any ruling, by casting doubt on the provenance of its designs and complicating its relationships with manufacturing partners.
