Apple Sues OpenAI Over Alleged Trade Secret Theft

Apple Inc has filed a lawsuit in the Federal Court of San Jose, California, accusing OpenAI of conducting an aggressive operation to poach hundreds of its employees and steal trade secrets to develop artificial intelligence hardware. The legal action marks a peak in tensions between the two tech giants, who in 2024 had previously collaborated to integrate ChatGPT into Apple’s product ecosystem. “At every level, from technical staff to the Chief Hardware Officer, OpenAI systematically coordinated with its business partners to steal trade secrets and confidential information belonging to Apple,” the 41-page lawsuit stated on Friday, local time. The case is expected to hinder OpenAI’s plans as it prepares for an initial public offering (IPO) on the stock market. OpenAI, which now boasts a massive valuation of $852 billion, had previously targeted the consumer hardware sector as a new engine for business growth. In its filing, Apple specifically targets io Products, OpenAI’s hardware subsidiary co-founded by Apple’s former iconic design chief Jony Ive, along with two other former Apple executives: Tang Yew Tan, now Chief Hardware Officer at OpenAI, and an engineer named Chang Liu. Tang Yew Tan, who spent 24 years at Apple as Vice President of Product Design for the iPhone and Apple Watch, is accused of using secret project code names when interviewing job applicants. Internal documents reveal that at least 400 former Apple staff have now defected to work under OpenAI. Furthermore, Tan allegedly instructed Apple engineers who intended to resign to bring unreleased physical prototype components—such as specialised battery cells, circuit boards, and original spare parts—into interview rooms for secret “show and tell” sessions. Apple asserts that these findings are merely the “tip of the iceberg” of industrial espionage practices carried out by OpenAI. The corporation is now demanding substantial material damages and requesting that the judge issue an injunction to permanently block the use of the illicitly obtained technology. “The hardware business being pioneered by OpenAI currently stands on an extremely fragile and corrosive foundation, as it was illegally built from the plunder of another party’s trade secrets,” Apple management stated in an official press release. OpenAI has remained silent and has yet to issue an official response to the lawsuit.