Apple sues OpenAI for stealing hardware secrets

Apple introduced a OpenAI and its hardware chief were sued on Friday for allegedly stealing the iPhone maker’s trade secrets, including unreleased parts and prototypes, secret designs, and documents about stealth projects.

The lawsuit accuses Tang Tan, chief hardware officer at OpenAI, who spent 24 years at Apple and oversaw the design of iPhone products, and his colleagues at the AI ​​company of encouraging people who leave or are considering leaving Apple to bring with them proprietary and unreleased technology. Tan allegedly helped train employees on how to evade Apple’s data security protocols and directed them to bring confidential Apple parts to job interviews at OpenAI.

“OpenAI’s emerging hardware business now rests on shaky foundations, corrupted to the core by its unlawful reliance on misappropriated trade secrets,” Apple says in the lawsuit, filed in U.S. District Court in San Jose. The company describes OpenAI as taking “illegal shortcuts” while under “increasing pressure to deliver its first commercial hardware product.”

“We have no interest in other companies’ trade secrets,” says Drew Pusateri, an OpenAI spokesperson. “We continue to focus on building innovative technology that empowers people everywhere.”

Tan did not immediately respond to requests for comment.

Apple spokeswoman Hannah Smith said the company “will always champion the hard work and innovations of our team, and we are taking all appropriate steps to do so.”

The lawsuit opens what could become the most serious and dramatic battle over intellectual property theft in Silicon Valley since self-driving ride-hailing company Waymo in 2017 accused Uber of stealing hardware designs when it brought in a former Waymo engineer who left with thousands of confidential files. Uber agreed to pay $245 million to settle the lawsuit during the middle of the trial the following year.

Apple and OpenAI have been partners since 2024, when the companies announced a landmark deal to distribute ChatGPT on iPhones, Macbooks, and iPads. But the relationship has soured in recent years, leading Apple to rely more heavily on Google’s Gemini AI technology as the basis for the company’s internal AI models. OpenAI and Apple are expected to compete more aggressively in the coming years in the emerging market for AI-powered consumer devices.

OpenAI hired more than 400 former Apple employees, according to the lawsuit. This includes several former Apple experts who are leading OpenAI’s development of AI-powered consumer devices. Last year, OpenAI paid $6.5 billion to acquire a startup called io Products that was co-founded by longtime Apple executives, including Tan, Scott Cannon, Evans Hankey, and famed designer Jony Ive.

io Products and Chang Liu, an electrical engineer at OpenAI who worked at Apple until January, are also named as defendants in the lawsuit. (Liu did not immediately respond to a request for comment.)

Apple’s investigation into the alleged theft is based on data and messages collected from its employees’ devices. The company discovered the alleged theft early this year after Liu never returned his laptop and wrote to a former colleague about still having access to Apple’s internal file-sharing system, according to the lawsuit. (Apple says in the filing that Leo access was enabled due to a bug that has now been fixed.)

The lawsuit states that Liu “downloaded dozens of confidential files related to Apple devices,” including a presentation on the manufacturing and testing of complex circuit boards used in Apple devices. He adds that Liu also trained an Apple employee he was recruiting to join OpenAI on how to “avoid problems with the security team” when copying confidential Apple files.

Apple wrote to OpenAI in February to raise initial concerns about the alleged theft but received no response. This led to further investigation and a lawsuit.