Apple Files Lawsuit Against OpenAI for Allegedly Misappropriating Hardware Trade Secrets

Apple has initiated a lawsuit against OpenAI and its chief hardware officer, alleging the theft of trade secrets from the iPhone manufacturer, which includes undisclosed components, prototypes, sensitive designs, and documents related to confidential projects.

The lawsuit charges Tang Tan, OpenAI’s chief hardware officer, who previously dedicated 24 years to Apple and led the design of the iPhone, along with his colleagues at the AI firm, with encouraging individuals leaving or contemplating departure from Apple to take proprietary and unreleased technology with them. Tan is accused of coaching potential hires on how to bypass Apple’s data security measures and instructing them to present confidential Apple components during job interviews at OpenAI.

“OpenAI’s fledgling hardware division is built on unstable ground, fundamentally compromised by its unlawful dependence on stolen trade secrets,” Apple asserts in the lawsuit filed in the US district court in San Jose. The complaint describes OpenAI’s approach as one involving “unlawful shortcuts” amid growing pressure to launch its first commercial hardware offering.

Neither OpenAI nor Tan has responded promptly to requests for comments.

Apple’s spokesperson Hannah Smith stated that the company “will always defend our teams’ hard work and innovations, and we are taking all appropriate steps to do so.”

The lawsuit marks the potential onset of what could evolve into a significant and dramatic legal confrontation over intellectual property infringement in Silicon Valley, reminiscent of the 2017 case when Waymo accused Uber of stealing hardware designs through a former Waymo engineer who left with numerous confidential files. Uber settled the lawsuit for $245 million midway through the subsequent trial the following year.

Since 2024, Apple and OpenAI have collaborated following a groundbreaking agreement to make ChatGPT available on iPhones, MacBooks, and iPads. However, over recent years, their partnership has soured, leading Apple to increasingly rely on Google’s Gemini AI technology for its internal AI models. A more intense rivalry between OpenAI and Apple is anticipated in the rapidly evolving market for AI-enabled consumer devices.

According to the lawsuit, OpenAI has recruited over 400 former Apple employees, including key veterans who are spearheading the development of AI-driven consumer products at OpenAI. Last year, OpenAI spent $6.5 billion on acquiring a startup named io Products, co-founded by former Apple executives like Tan, Scott Cannon, Evans Hankey, and renowned designer Jony Ive.

The lawsuit also names io Products and Chang Liu, an electrical engineer at OpenAI who remained at Apple until January, as defendants. Liu did not provide a response to requests for comment.

Apple’s inquiry into the alleged theft is based on data and messages collected from its employees’ devices. The company became aware of the potential theft earlier this year after Liu did not return his company-issued laptop and communicated with a former colleague about maintaining access to Apple’s internal file-sharing system, as noted in the lawsuit. Apple claims Liu’s access was granted due to a bug that has since been resolved.

According to the lawsuit, Liu “downloaded dozens of Apple’s confidential hardware-related files,” which included a presentation concerning the manufacturing and testing of complex circuit boards used in Apple’s devices. It also states that Liu advised an Apple employee he was recruiting to join OpenAI on how to “‘avoid trouble with the security team’ while copying confidential Apple files.”

Apple reached out to OpenAI in February to express initial concerns regarding the alleged theft but did not receive a response. This prompted further investigation and ultimately led to the filing of the lawsuit.

Apple discovered that before his departure, Tan had emailed himself details concerning the company’s suppliers. Other departing employees heading to OpenAI reportedly followed suit, according to Apple’s allegations. Furthermore, Tan “has advised job applicants still employed at Apple to bring ‘Actual parts’ from Apple to their interviews for ‘show and tell’ sessions, where he and his team at OpenAI can extract additional confidential information from Apple,” the lawsuit claims, specifically mentioning batteries, logic boards, and shields as desired components.