Apple Sues OpenAI, Claims Former Employees Stole Trade Secrets

In brief
- Apple sued OpenAI and two former employees, alleging theft of hardware trade secrets.
- The complaint claims former Apple employees accessed confidential files, shared supplier information, and used internal information at OpenAI.
- The lawsuit follows OpenAI’s $6.5 billion acquisition of Jony Ive’s hardware startup io Products.
Apple has sued OpenAI and two former employees, accusing the ChatGPT maker of using stolen trade secrets for its consumer hardware efforts.
The complaint, filed Friday in the U.S. District Court for the Northern District of California, names former Apple senior system electrical engineer Chang Liu and former iPhone and Apple Watch design executive Tang Yew Tan, along with OpenAI Foundation, OpenAI Group PBC, and io Products.
Apple alleges Liu, who left the company in January after eight years, failed to return a company laptop and later accessed Apple’s internal systems through an authentication bug.
“While employed by OpenAI, Mr. Liu also exploited a rare, previously unknown authentication bug to access Apple’s shared network folders,” Apple’s attorneys said in the complaint. “Upon discovering that he had this unauthorized access to Apple’s systems, Mr. Liu did not report it, return his stolen Apple-issued work laptop, or delete the program that allowed the access.”
Apple alleges Liu downloaded dozens of confidential hardware files, including information about unreleased products, engineering presentations, technical specifications, and proprietary project data.
The company also alleges Tan, who spent 24 years at Apple before becoming OpenAI’s chief hardware officer, used confidential information from his time at Apple to benefit OpenAI.
The complaint claims Tan used Apple's internal project names during OpenAI interviews and asked about unreleased products. Apple also alleges candidates were told to bring “actual parts,” for “show and tell.”
Apple further claims OpenAI’s recruiting process requested “CAD/design artifacts,” prototypes, supplier information, and details about employees’ work on Apple hardware.
Apple and OpenAI did not immediately respond to a request for comment by Decrypt.
The lawsuit follows OpenAI’s $6.4 billion acquisition of io Products, the hardware startup founded by former Apple designer Jony Ive. Ive is not named in the complaint.
According to the filing, OpenAI’s hardware division has hired more than 400 former Apple employees. Apple claims it contacted OpenAI in February with concerns about confidential information entering the company but did not receive a response.
The news comes after a separate trade secret dispute between OpenAI and Elon Musk’s xAI. In September, xAI sued OpenAI, alleging the ChatGPT maker recruited former employees to obtain confidential source code, training methods, and data center strategies.
OpenAI denied the allegations, and a federal judge dismissed the lawsuit in June, finding xAI failed to show OpenAI encouraged a former employee to disclose confidential information.
The lawsuit is a stark pivot from Apple and OpenAI’s earlier relationship.
In 2024, Apple tapped OpenAI to bring ChatGPT to Siri as part of its Apple Intelligence initiative. However, earlier this year, Apple turned to Google’s Gemini to power its next generation of AI models after delays stalled the rollout.

Facts Only

* Apple sued OpenAI and two former employees, Chang Liu and Tang Yew Tan.
* The lawsuit alleges theft of hardware trade secrets.
* Chang Liu allegedly accessed Apple's internal systems via an authentication bug.
* Liu allegedly downloaded confidential hardware files, including unreleased product information and technical specifications.
* Tang Yew Tan allegedly used confidential Apple information in interviews and recruiting processes.
* The complaint names Liu, Tan, OpenAI Foundation, OpenAI Group PBC, and io Products.
* Apple contacted OpenAI in February with concerns about confidential information entering the company.
* OpenAI acquired the hardware startup io Products for $6.5 billion.
* OpenAI's hardware division has hired over 400 former Apple employees.

Executive Summary

Apple initiated a lawsuit against OpenAI and two former employees, Chang Liu and Tang Yew Tan, alleging the theft of hardware trade secrets related to consumer hardware efforts. The complaint names Liu, a former system electrical engineer who allegedly accessed Apple systems via an authentication bug and downloaded confidential files, and Tan, a former design executive who reportedly used confidential information from his tenure at Apple to benefit OpenAI. The legal action follows OpenAI's acquisition of io Products, a hardware startup founded by Jony Ive. The allegations specifically target the use of internal project names, supplier information, CAD/design artifacts, and details about work on Apple hardware during the recruitment and development processes for OpenAI’s hardware division.

Full Take

The narrative centers on the flow and potential misappropriation of proprietary knowledge across corporate boundaries, highlighting a tension between innovation aggregation (OpenAI) and proprietary asset protection (Apple). The pattern suggests that complex corporate transitions—such as acquisitions and hiring practices—can create vectors for leakage if internal controls are bypassed or exploited by departing personnel. The existence of parallel disputes, such as the one involving xAI, indicates a broader systemic concern regarding how intellectual property moves within the AI ecosystem. The implication is that the value derived from accumulated institutional knowledge can be extracted through technical exploits (the authentication bug) or leveraging privileged positions during hiring (Tan's alleged use of internal details). The central question is whether the incentive structures and oversight mechanisms governing these cross-company data transfers are robust enough to prevent insider actors from leveraging past employment for current commercial advantage. What specific institutional checks failed when Apple concerns were raised in February, and how do subsequent AI development strategies impact the perceived value and security of legacy engineering data?

Sentinel — Human

Confidence

The text reads like synthesized reporting that accurately relays complex legal allegations and contextual background surrounding the Apple/OpenAI dispute.

Signals Detected

Moderate sentence length variance and specific legal/technical terminology usage.

The flow is direct, focusing purely on reported allegations and subsequent events without excessive hedging or unsupported emotional framing.

Logical progression tracing the Apple/OpenAI lawsuit to related background context (io Products acquisition, xAI dispute) without obvious template matching.

Specific legal claims and named allegations point toward primary source reporting, despite the synthesis of complex facts.

Human Indicators

Use of specific court locations (N.D. Cal.), dates (Friday, January, September), and detailed citation of alleged actions attributed to named individuals and entities suggest journalistic sourcing.

The structure builds a narrative by connecting disparate events (lawsuit, acquisition history) rather than presenting a purely abstract argument.