Apple sues OpenAI alleging systematic trade secret theft

Apple ↗ 0.24% filed a sweeping trade secrets lawsuit against OpenAI on Friday, July 10, accusing the AI company and its senior hardware executives of orchestrating a systematic campaign to steal proprietary information — a legal strike that could disrupt OpenAI's plans to build an iPhone rival well before any trial begins.

The Allegations

The 41-page complaint, filed in the U.S. District Court for the Northern District of California, names OpenAI, its hardware subsidiary io Products, Chief Hardware Officer Tang Tan, and former Apple engineer Chang Liu as defendants. Apple alleges that OpenAI instructed former Apple employees to bring confidential prototypes and hardware components to job interviews, coached departing workers on how to bypass Apple's security procedures, and used recruiting conversations to extract intelligence about unreleased products.cnbc+3

Tan, who spent 24 years at Apple overseeing iPhone product design, is accused of using internal Apple project code names during OpenAI's recruiting process and directing a pattern of information theft. Apple also alleges that Liu exploited a software vulnerability to maintain access to Apple's internal file servers after joining OpenAI, downloading presentations, manufacturing details, and testing procedures.wired+3

"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," Apple stated in the filing. OpenAI responded that it has "no interest in other companies' trade secrets" and remains "focused on building innovative technology".calcalistech+1

Impact on OpenAI's Hardware Plans

The lawsuit arrives at a critical juncture for OpenAI's hardware efforts. The company, which acquired Jony Ive's hardware startup io for $6.9 billion, has been targeting a device reveal in the second half of 2026 and a product shipment no earlier than February 2027. According to Bloomberg's Mark Gurman, OpenAI still believes it is on track to announce its first product this year and release it in 2027.businessinsider+3

But even before the case reaches trial, the legal action is expected to slow OpenAI's recruiting pipeline and complicate its engineering culture. Apple is seeking an injunction that would force OpenAI to redesign its hardware without Apple's proprietary information — a demand that, if granted, could push development timelines further out. Building a broader family of devices beyond the initial product will likely prove more challenging under the legal cloud.youtube+2

A Larger Battle

The case draws comparisons to Google's 2016 lawsuit against Anthony Levandowski, the former engineer who stole self-driving car secrets before joining Uber — though Apple alleges coordination on a far larger scale, involving more than 400 former employees recruited with lucrative compensation packages. The discovery process alone is expected to expose internal communications that could prove damaging to OpenAI's reputation and its eventual IPO plans.calcalistech

Apple is seeking damages, the return of all proprietary materials, and a jury trial.axios+1