Apple Sues OpenAI: Inside the Trade Secrets War Threatening Its ChatGPT Hardware Device

Apple has taken its increasingly tense relationship with OpenAI into federal court, accusing the ChatGPT maker of stealing trade secrets to help build a rival piece of AI hardware. The lawsuit, filed Friday in a California federal court, names the ChatGPT maker, its hardware unit io Products, and two former Apple employees as defendants — and it marks one of the most public ruptures yet between two of the most powerful companies in tech.

Key Takeaways

• Apple filed suit in California federal court on July 11, accusing its rival of stealing trade secrets to build competing AI hardware, and named OpenAI, io Products and two former employees as defendants.
• The two former staff named are Tang Tan, who helped design the iPhone, Apple Watch and iPod and is now OpenAI’s chief hardware officer, and Chang Liu, a former electrical engineer who joined the company earlier this year.
• Apple alleges Liu downloaded confidential hardware files onto a company-issued device he kept after departing, and that Tan told job candidates still employed there to bring “actual parts” to their interviews.
• OpenAI denies wrongdoing; spokesperson Drew Pusateri said the company has “no interest in other companies’ trade secrets” and remains focused on “building innovative technology.”
• The dispute follows OpenAI’s 2024 partnership with Apple to power a ChatGPT “answer engine” on the iPhone, and its subsequent hiring of former Apple design chief Jony Ive to build a secretive AI hardware device, part of a deal that valued Ive’s startup io Products at nearly $6.5 billion.

Why It Matters

Apple and OpenAI were partners just two years ago, when the iPhone maker turned to ChatGPT to plug gaps in Siri. That arrangement has steadily curdled into rivalry as the ChatGPT maker has pushed deeper into consumer hardware — the exact turf its former partner has dominated for decades. A trade-secrets lawsuit of this size, naming a sitting chief hardware officer personally, is a signal that the iPhone maker sees these hardware ambitions as a direct competitive threat, not just an awkward side project from a onetime partner.

The timing also matters. OpenAI has been weighing a path to going public and is fending off intensifying competition from Anthropic and Google, according to AP reporting. A messy, high-profile legal fight over the legitimacy of its hardware unit’s origins is the kind of headline risk that can complicate fundraising, recruiting and investor confidence at a sensitive moment.

The Allegations, Explained

Apple’s filing claims OpenAI encouraged its employees who were being recruited to share confidential information, and even coached them on how to avoid scrutiny when taking jobs at the rival company. “This case is about Apple’s former employees stealing Apple’s trade secrets for the benefit of OpenAI,” the filing states. “Apple brings this suit to put a stop to it.”

Apple says it began investigating after concerns surfaced and “uncovered a pattern of theft” by former staff who had moved to the rival company. Specifically, the lawsuit alleges Chang Liu, a former electrical engineer entrusted with sensitive product development work, accessed and downloaded confidential hardware-related files using a company-issued device he retained after leaving. Separately, it alleges Tang Tan — now the ChatGPT maker’s chief hardware officer — directed job candidates who were still employed there to bring “actual parts” to their interviews.

Apple says it first raised its concerns with OpenAI in February but received no response, prompting Friday’s filing. OpenAI has said only that it is still reviewing the suit.

What’s at Stake for OpenAI’s Hardware Bet

OpenAI has never detailed exactly what its in-development device is, describing it only as an attempt to find a new way of interacting with AI beyond “traditional products and interfaces” — echoing, but going beyond, the screen-free smart speakers Amazon and Google introduced a decade ago. The company recruited Jony Ive, Apple’s former chief design officer, to lead the project, and acquired his startup io Products in a deal valued at nearly $6.5 billion. Its CFO, Sarah Friar, told the AP in April that consumer hardware would arrive “towards the end of this year.”

Apple’s lawsuit strikes directly at that timeline, alleging the entire hardware effort “rests on the shakiest of foundations, rotten to its core by its illegal reliance on misappropriated trade secrets.” The io Products venture is already tangled in a separate trademark lawsuit brought by a little-known startup called iyO Inc. against Ive and OpenAI CEO Sam Altman over the similar-sounding name; that suit has since added its own trade-secret theft claims against Tan. This new filing names io Products as a defendant as well, layering a second major legal threat onto a hardware program that hasn’t even shipped yet.

The Bigger Picture: Tech’s Long History of Trade-Secret Wars

Apple’s suit fits a familiar Silicon Valley pattern: a company accuses departing employees of taking sensitive know-how to a rival building a competing product. The most famous precedent is Waymo’s 2017 trade-secrets case against Uber, which centered on a former engineer accused of downloading self-driving files before leaving to found a company Uber acquired; that case settled during trial with Uber handing over a stake worth roughly $245 million. Trade-secret disputes of this scale rarely stay narrowly legal for long — they tend to become referendums on how aggressively companies can recruit from rivals in fields, like AI hardware, where a handful of engineers hold enormous institutional knowledge.

That dynamic is especially acute in AI right now, where Apple, OpenAI, Google, Meta and Anthropic are all racing for the same small pool of hardware and machine-learning talent. For more on how that competition is reshaping the industry, see our AI Explained hub, which tracks the companies, models and money driving the AI race.

Predictions: Where This Goes Next

The following are analyst-style estimates based on how similar trade-secrets and IP disputes between major tech companies have typically unfolded, not confirmed outcomes.

• Near term (weeks): Expect OpenAI to file a formal response and likely seek to have parts of the suit narrowed or dismissed, while both companies manage the story publicly to limit reputational damage.
• Medium term (months): Discovery in cases like this often surfaces internal emails and messages that shape public perception well before any trial; a settlement or confidential resolution is a plausible outcome, as is common in high-profile trade-secret disputes.
• Longer term: If OpenAI’s hardware device slips past its “end of this year” target cited by its CFO, this lawsuit — layered on top of the separate iyO trademark fight — is likely to be cited as a contributing factor, alongside ordinary hardware development risk.

Frequently Asked Questions

Why did Apple sue OpenAI? Apple accuses the ChatGPT maker of encouraging former employees to share confidential trade secrets to help build its in-development AI hardware device, and of coaching them on how to avoid scrutiny while doing so.

Who are Tang Tan and Chang Liu? Tang Tan is a former longtime Apple hardware designer who worked on the iPhone, Apple Watch and iPod and is now OpenAI’s chief hardware officer. Chang Liu is a former electrical engineer at the company who joined OpenAI earlier this year; Apple alleges he downloaded confidential files after leaving.

What is the AI hardware device OpenAI is building? The company hasn’t disclosed exact details, describing it only as a new way to interact with AI beyond traditional screens and apps. Former Apple design chief Jony Ive is leading the project through io Products, which OpenAI acquired for nearly $6.5 billion.

Could this affect OpenAI’s plans to go public?
It’s possible. High-profile litigation questioning the legitimacy of a flagship product line is the kind of risk that can complicate an IPO process, though there’s no confirmed evidence yet that it has changed OpenAI’s plans.

Sources

AP News: “Apple files lawsuit accusing OpenAI of stealing trade secrets,” July 11, 2026, corroborated by Reuters technology coverage. High confidence based on named court filing and on-record statements from both companies.