Tech Giant Apple Accuses OpenAI of Trade Secret Theft

Global tech behemoth, Apple, initiated legal proceedings against OpenAI on Friday, alleging that the artificial intelligence firm engaged in a deliberate scheme to misappropriate the iPhone manufacturer's proprietary trade secrets. This legal action comes as OpenAI reportedly works on developing its own line of consumer hardware. The suit, lodged in a federal court in San Jose, California, outlines what Apple describes as an aggressive campaign by OpenAI to entice Apple staff away and unlawfully acquire sensitive data crucial for creating its own devices.

This legal battle signifies a significant worsening of relations between the two technology giants, who had previously collaborated in 2024 to embed ChatGPT into Apple's product ecosystem. However, that partnership has since soured considerably. Back in May, Bloomberg had indicated that OpenAI was contemplating its own lawsuit against Apple, claiming the Cupertino-based company did not sufficiently promote their ChatGPT integration.

In its 41-page complaint, Apple emphatically stated, "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." This lawsuit is expected to throw a spanner in the works for OpenAI’s highly anticipated initial public offering (IPO). The AI company, currently valued at approximately $852 billion and having secured over $180 billion from investors, views expansion into consumer hardware as a critical avenue for future growth.

In a statement issued to AFP, Apple declared, "Significant evidence has emerged suggesting individuals employed by OpenAI wrongfully took Apple’s secret and confidential information regarding our unreleased technologies, processes and products." The company further affirmed its commitment, stating, "We will always defend our teams’ hard work and innovations, and we are taking all appropriate steps to do so."

Requests for comment directed at OpenAI did not receive an immediate response. The legal filing specifically names OpenAI, its hardware division io Products – a venture co-founded by Apple's former design guru, Jony Ive – and two ex-Apple personnel: Tang Yew Tan, who now serves as OpenAI’s chief hardware officer, and engineer Chang Liu.

Apple is seeking financial damages and an injunction to prevent OpenAI from utilising its proprietary confidential data. The tech giant asserted that the lawsuit became imperative after OpenAI reportedly failed to address concerns raised by Apple as far back as February.

Delving into the allegations, Apple claims that Tan, who dedicated 24 years to the company – culminating as vice president of product design for the iPhone and Apple Watch – before co-founding io Products (later acquired by OpenAI for approximately $6.5 billion in 2025), allegedly employed confidential project code names during OpenAI's hiring processes. He reportedly used these to question prospective employees about unreleased Apple innovations. The complaint further highlights that roughly 400 individuals currently employed by OpenAI are former Apple staff members. Furthermore, Tan is accused of instructing Apple employees to bring actual hardware components, including batteries, circuit boards, and other parts, to interviews for what he termed "show and tell" sessions.

Apple characterized its discoveries as merely "the tip of the iceberg," indicating that it has restricted insight into the full extent of activities occurring within OpenAI. The complaint concludes with a scathing assessment, stating, "OpenAI’s nascent hardware business now rests on the shakiest of foundations, rotten to its core by its illegal reliance on misappropriated trade secrets."