Apple Files Trade Secrets Lawsuit Against OpenAI and Former Employees

Apple has filed a federal lawsuit against OpenAI. The company claims OpenAI carried out a planned effort to obtain confidential Apple trade secrets. According to the complaint, OpenAI did this by hiring former Apple employees and using their inside knowledge as both companies expanded into consumer hardware.

The lawsuit was filed on July 10 in the U.S. District Court for the Northern District of California. Apple named OpenAI, its hardware unit io Products, Chief Hardware Officer of OpenAI Tang Yew Tan, and former Apple engineer Chang Liu as defendants.

Apple says more than 400 former employees have moved to OpenAI in recent years. The company says some employees disclosed confidential details about unreleased Apple products, manufacturing processes, and supplier relationships.

Apple Claims Former Executive Used Insider Knowledge During Recruitment

Apple’s complaint focuses heavily on Tang Tan. He spent 24 years at Apple and most recently served as Product Design Vice President for the Apple Watch and iPhone before leaving the company.

According to Apple, Tan relied on his knowledge of confidential projects while recruiting current Apple employees. Insider knowledge can be exploited in various ways; not too long ago, hackers stole $2.7 million from a decentralized exchange by exploiting a protocol flaw.

Coming back to the story, the lawsuit claims he asked workers about unreleased products by using Apple’s internal project code names.

Apple also alleges Tan told some job candidates to bring physical Apple hardware parts to interviews. The complaint alleges the meetings served as “show-and-tell” sessions for discussing confidential components.

The lawsuit further claims Tan shared an internal Apple document called “Need to Know.” Apple says this document explained the company’s employee exit process and security checks. According to the complaint, the document gave future OpenAI hires advanced information about the forensic reviews Apple carries out when employees leave the company.

Apple argues that sharing this material could help departing employees understand how the company investigates possible data theft. The lawsuit also accuses former Apple engineer Chang Liu of keeping a laptop from Apple after leaving the company in January 2026.

According to Apple, Liu later took advantage of what the company describes as an unknown authentication weakness. Apple claims this allowed him to continue accessing its internal network after his employment had ended.

The complaint says Liu downloaded dozens of confidential engineering documents. Apple claims the files included more than 1,000 pages covering hardware development work and manufacturing methods for multi-layer logic boards.

Apple also alleges Liu privately joked about the security weakness instead of reporting it to the company. According to the complaint, Liu later advised another Apple employee who planned to interview with OpenAI.

Apple claims he suggested confidential materials to study and explained how to allegedly remove files without triggering the company’s security systems.

Apple Says OpenAI Also Targeted Its Manufacturing Partners

Apple’s claims go beyond former employees. The lawsuit alleges OpenAI also tried to obtain confidential manufacturing knowledge through Apple’s suppliers.

According to the complaint, OpenAI approached one manufacturing partner and asked it to recreate Apple’s confidential metal-finishing process without authorization. Apple also claims OpenAI contacted one of its battery suppliers. The lawsuit says the company used insider language while seeking information about Apple-specific battery components.

Apple argues these were not isolated incidents. Instead, the company claims the conduct reflects a coordinated strategy involving employee recruitment and supplier outreach.

Apple says the alleged actions were designed to speed up OpenAI’s consumer hardware development. As such, Apple is asking the court for damages and an injunction under the Defend Trade Secrets Act and California law. The company argues that the alleged misuse of its confidential information continues to threaten its intellectual property.

OpenAI Rejects Apple’s Claims as Legal Fight Begins

The lawsuit marks a major change in the relationship between Apple and OpenAI. The two companies worked together in 2024 when Apple added ChatGPT to parts of its ecosystem. Since then, however, both companies have moved closer to competing in consumer hardware.

OpenAI broadened its hardware goals through its io Products division after acquiring hardware startup io, which was co-founded by former Apple design chief Jony Ive.

OpenAI has denied Apple’s allegations. According to the company, it has no interest in using competitors’ confidential information. OpenAI said the lawsuit has no factual basis and added that it will defend itself strongly in court.

The company also maintains that its hardware work depends on its own engineers, research, and product development instead of confidential information from former Apple employees. Apple, however, argues the alleged conduct goes far beyond the actions of individual workers.

The complaint claims the defendants worked together to obtain confidential knowledge that could help OpenAI compete in the growing market for AI-powered consumer devices. The case is expected to draw close attention across the technology industry.

It could influence how courts handle disputes involving employee movement between companies, trade secret protection, and competition in the fast-growing artificial intelligence sector. For now, the allegations remain claims made in court.

Apple must prove its case, while OpenAI and the other defendants will have the opportunity to challenge the accusations as the legal process moves forward.