Background of the Lawsuit
Apple Inc. has initiated legal action against OpenAI, accusing the artificial intelligence company of orchestrating a systematic theft of trade secrets. The lawsuit, filed in the U.S. District Court for the Northern District of California, alleges that former Apple employees improperly transferred confidential information to OpenAI to accelerate its hardware development efforts. The case centers on two former Apple employees: Tang Tan, who served as Vice President of Product Design at Apple, and Chang Liu, a former senior system electrical engineer. Apple claims that these individuals, along with OpenAI and its subsidiary io Products, engaged in a coordinated effort to steal proprietary data.
The Core Allegations
According to Apple's complaint, Tang Tan used his insider knowledge of Apple's unannounced projects to grill job candidates during interviews, soliciting additional confidential details. The lawsuit states that Tan directed Apple employees still working at the company to bring actual hardware components and prototypes to their interviews for 'show and tell' sessions. One candidate reportedly expressed surprise, stating he 'didn't even know we could take those from the office.' Apple further alleges that Tan possessed and distributed an internal Apple 'Need to Know' security document to new OpenAI hires before they formally resigned from Apple. This document outlined departure protocols, which Apple claims the hires then deliberately violated to evade security measures.
Chang Liu, meanwhile, is accused of exploiting a security bug to download confidential engineering files after leaving Apple. Instead of reporting the vulnerability, Liu allegedly joked about it in messages, writing 'LOL' and 'so funny.' He also failed to return an Apple-issued laptop. The lawsuit alleges that Liu downloaded a compilation of technical files spanning over a thousand pages, including detailed manufacturing documents for Apple's complex circuit boards. Additionally, Liu is said to have coached another Apple employee, whom he was recruiting for OpenAI, on which confidential materials to study before her interview.
OpenAI's Hardware Ambitions and the Role of Jony Ive
This legal battle comes as OpenAI intensifies its push into consumer hardware. The company's hardware efforts are led by Jony Ive, Apple's former chief design officer, who was instrumental in shaping Apple's iconic product designs. OpenAI acquired Ive's startup, io Products, last year in a $6.5 billion deal, bringing in over 50 engineers, developers, and other employees. Among them were Scott Cannon, Evans Hankey, and Tang Tan—all former Apple executives. Hankey led Apple's design team for several years after Ive's departure, and Cannon also previously worked at Apple. Notably, the lawsuit does not name Ive, Hankey, or Cannon personally, focusing instead on Tan and Liu.
OpenAI's hardware roadmap includes a custom-designed smartphone, according to analyst Ming-Chi Kuo, with a potential launch in 2028. Reports from The Information also indicate that OpenAI is working on a HomePod-style smart speaker. These ambitions directly intersect with Apple's core product categories, making the alleged trade secret theft particularly sensitive. Apple claims that OpenAI's hardware business now rests on the stolen information, with the lawsuit stating that 'this is the tip of the iceberg' and that Apple lacks visibility into the full extent of misconduct at OpenAI.
Specific Incidents Detailed in the Filing
The complaint describes a pattern of behavior where Tan used Apple's internal project codenames to ask candidates about unannounced products. For instance, during an interview, Tan reportedly asked 'What's the plan?' for a specific Apple project by codename. The lawsuit also accuses OpenAI of instructing candidates to bring 'CAD/design artifacts' and 'prototypes' to interviews, and to divulge details about subsystem and component selection, tools and methodologies for system integration, and vendor communication and collaboration. One candidate began screenshotting and downloading files related to a highly confidential Apple project just hours before interviewing with Tan, who then solicited more information about that same project. Apple describes this as an 'established pattern.'
Beyond individual recruitment, Apple alleges that OpenAI used a trusted Apple partner to carry out Apple's proprietary metal-finishing technique, misleading the partner into believing Apple had granted permission. OpenAI also approached a second longtime Apple supplier that works on power and battery manufacturing, using insider terminology to ask targeted questions about specific Apple components. These actions, Apple argues, demonstrate a coordinated effort to leverage stolen knowledge across multiple supply chain points.
Previous Interactions and Legal Context
Apple states that it first raised concerns directly with OpenAI in February, asking the company to investigate and address the issue. According to the lawsuit, OpenAI never responded. The filing also notes that Apple and OpenAI had a prior partnership to integrate ChatGPT into Siri, but the lawsuit explicitly states that this agreement is not at issue. Interestingly, Bloomberg had reported that OpenAI was preparing legal action against Apple over how that partnership played out, but today's lawsuit shifts the narrative. The suit seeks injunctive relief and damages, aiming to stop further dissemination of Apple's trade secrets and to hold OpenAI accountable.
The broader context includes the fact that over 400 former Apple employees are now working at OpenAI, according to the filing. This large-scale migration has raised concerns at Apple about the protection of its intellectual property. The company has strict departure protocols, including security checklists and document return procedures, which Apple claims OpenAI hires systematically evaded. The lawsuit highlights a concerning trend: employees leaving for OpenAI often took steps to bypass these processes, including retaining laptops with proprietary data and downloading files before exiting.
The case underscores the intense competition between the two tech giants in the realms of artificial intelligence and consumer hardware. Apple has long guarded its design and engineering secrets with extreme rigor, and this lawsuit represents a significant escalation. As OpenAI continues to develop its own hardware, the outcome of this legal battle could have far-reaching implications for trade secret law and the mobility of talent in Silicon Valley.
Source: 9to5Mac News