Apple has filed a lawsuit against OpenAI, its commercial arm, the OpenAI Foundation, hardware startup io Products, and two former Apple executives, alleging they misappropriated the company's trade secrets to accelerate OpenAI's consumer hardware ambitions.
The lawsuit, filed on Friday in the US District Court for the Northern District of California, accuses OpenAI of carrying out a coordinated effort to obtain and exploit Apple's confidential information through former employees, recruitment practices, and supplier relationships.
OpenAI did not immediately respond to requests for comment.
The legal dispute marks a significant escalation in the relationship between the two companies as competition in the artificial intelligence industry intensifies. It also highlights the growing race to develop AI-powered consumer devices that could eventually operate independently of traditional smartphones and app ecosystems. Industry analysts believe OpenAI is working on a consumer hardware product that could ultimately compete with Apple's iPhone.
"Apple sees OpenAI moving from partner to potential rival, while OpenAI is trying to reduce its dependence on the iPhone and build a direct relationship with consumers," said PP Foresight analyst Paolo Pescatore. "Even if the allegations are not proven, the lawsuit could delay OpenAI's hardware ambitions and further weaken what is already becoming an increasingly fragile partnership."
The lawsuit comes shortly after OpenAI successfully defended itself against a separate legal challenge brought by Elon Musk's xAI.
Allegations Against Former Apple Executives
Apple has named former senior system electrical engineer Chang Liu and former Vice President of Product Design Tang Yew Tan as defendants. Neither immediately responded to requests for comment.
According to the complaint, Liu failed to return his company-issued laptop after leaving Apple and later exploited an authentication vulnerability to access Apple's internal systems, allegedly downloading dozens of confidential hardware-related files.
Apple also alleges that Tang, who now leads OpenAI's hardware division, systematically retained and used Apple's confidential information before his departure. The company claims he emailed himself supplier information and internal industry reports while preparing to leave Apple. According to his LinkedIn profile, Tang spent nearly 24 years at Apple, working primarily on the iPhone.
The complaint further alleges that Tang encouraged Apple employees interviewing at OpenAI to bring Apple hardware components to job interviews for what were described as "show and tell" sessions. Apple cited one instance in which a candidate allegedly remarked that they "didn't even know we could take those from the office."
Concerns Raised With OpenAI
Apple said it contacted OpenAI in February after becoming concerned that its confidential information was being used by the AI company. According to the lawsuit, Apple requested discussions to address the issue, but alleges that OpenAI did not respond.
The company noted that more than 400 former Apple employees now work at OpenAI. While acknowledging that former employees naturally possess knowledge gained during their careers, Apple argued that such experience does not grant OpenAI the right to use its confidential information.
"That OpenAI now employs people who were once entrusted with Apple's trade secrets does not entitle OpenAI to use that information to jumpstart its hardware efforts," Apple stated in its complaint.
Apple also alleges that OpenAI employees sought confidential manufacturing information from Apple suppliers. In one cited example, the company claims a supplier performed a proprietary metal-finishing process after mistakenly believing OpenAI had Apple's authorisation to use it.
A Dispute Between Existing Partners
The lawsuit comes despite an ongoing partnership between the two companies.
In 2024, Apple integrated OpenAI's ChatGPT into Apple Intelligence, allowing Siri to access ChatGPT for certain queries and enabling iPhone users to subscribe to ChatGPT directly through iOS settings.
Apple also rolled out a major upgrade to Siri last month after a series of delays following its original announcement two years earlier.
Meanwhile, OpenAI has expanded its hardware ambitions through its $6.5 billion acquisition of hardware startup io Products, founded by former Apple designer Jony Ive. Apple has named io Products as a defendant in the lawsuit, although Ive himself is not listed as a defendant.
The legal battle follows reports that OpenAI had earlier considered taking legal action against Apple over an alleged breach of contract, although no such lawsuit ultimately materialised.
