Apple sues OpenAI, alleging former employees stole trade secrets for AI hardware development

Apple has filed a federal lawsuit against OpenAI, its hardware subsidiary io Products, and two former Apple employees.

Back in 2024, Jony Ive created a new startup called io to explore hardware designs for the AI world and also began working with OpenAI. Later in 2024, OpenAI's startup fund made an investment in io and subsequently increased its stake to own about 23% of the hardware startup. In May 2025, OpenAI acquired Ive's io in a $6.5 billion all-stock deal. At the time of the acquisition, io had around 55 engineers, scientists, researchers, physicists, and product development specialists.

Today, Apple filed a lawsuit against OpenAI and two former employees in the U.S. District Court for the Northern District of California, accusing them of stealing confidential information and trade secrets to support OpenAI’s consumer hardware. The two former Apple employees named in the lawsuit are Chang Liu and Tang Yew Tan.

Apple claims Liu, a former senior system electrical engineer who joined OpenAI in January 2026, retained an Apple-issued laptop and later exploited an authentication bug to access the company’s internal systems. According to the complaint, Liu downloaded dozens of confidential hardware files, including information about unreleased products, technical specifications, engineering presentations, and proprietary project data.

Apple also targets Tang Yew Tan, who spent 24 years at Apple and previously served as vice president of product design for the iPhone and Apple Watch. Notably, Tan is now OpenAI’s chief hardware officer. Apple claims that Tan used confidential information while recruiting Apple employees and instructed some candidates to bring physical components, CAD files, design materials, and prototypes to OpenAI interviews. The company stated in its lawsuit that OpenAI used these interviews to obtain details about Apple’s component selection, engineering processes, suppliers, and manufacturing methods.

Apple further alleges that OpenAI used its confidential information when approaching manufacturing partners, including asking one partner to perform a proprietary metal-finishing technique. When Apple tried to connect with OpenAI in February to raise concerns and request an investigation into this alleged IP and trade secret theft, it received no response.

OpenAI provided the following statement in response to Apple's lawsuit:

We have no interest in other companies' trade secrets. We remain focused on building innovative technology that empowers people everywhere.

Apple is now asking the court to prevent OpenAI from using or disclosing its trade secrets, require the return of Apple property, and award compensatory damages.

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Posted Sunday 12 July 2026 at 7:37 am AEST (my time).

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