Apple Files Lawsuit Against OpenAI for Alleged Theft of Trade Secrets, Claims Involvement of Former Employees

Apple filed a federal lawsuit against OpenAI and its hardware chief on July 10, 2026, alleging the theft of trade secrets. The case, filed in the U.S. District Court for the Northern District of California, marks a legal escalation in the ongoing competition between the two companies as they expand their AI hardware businesses, sparking disputes over talent and proprietary information.

According to a report by Andrew E. Freedman of Tom’s Hardware, Apple’s complaint accuses OpenAI and its associates, led at least partly by former Apple employees, of soliciting candidates from Apple, extracting knowledge of Apple’s confidential information, and continuing to exploit this information even after joining OpenAI. Apple further alleges that OpenAI misappropriated its trade secrets and confidential data through various means.

Key Parties in the Lawsuit

The defendants named in the lawsuit include OpenAI’s technical staff member Chang Liu, its hardware chief Tang Tan, OpenAI itself, and a company named io Products. io Products was co-founded by Tan, former Apple design chief Jony Ive, his successor Evans Hankey, and former Apple designer Scott Cannon. While the lawsuit avoids directly mentioning the founders, Ive’s name has been cited in the URL of related documents.

Tan previously served as Apple’s Vice President of Product Design, contributing to the development of the iPhone, AirPods, and Apple Watch. Liu, on the other hand, is a former senior electrical engineer at Apple.

Apple’s Allegations —

From Recruitment to Data Misappropriation

According to the complaint, Apple expressed its concerns to OpenAI in February 2025, but the company allegedly did not respond. Apple claims that Tan attempted to acquire confidential information from Apple employees by requesting job candidates to bring components for “show-and-tell” purposes and using his knowledge of Apple’s internal workings to extract additional information from applicants.

As for Liu, Apple accuses him of failing to return his Apple laptop and exploiting a security bug to access Apple files.

Furthermore, Apple alleges that OpenAI instructed incoming employees to remain at Apple as long as possible without disclosing their new employment and to continue accessing confidential information during that time.

The lawsuit asserts, “OpenAI’s hardware business is fundamentally tainted by its illegal reliance on misappropriated trade secrets.”

According to Apple, over 400 former Apple employees are currently working at OpenAI.

AI Hardware Strategies of Both Companies

Apple is reportedly working on several AI-powered hardware projects, including camera-equipped AirPods, pendant-style devices, and home robots. Conversely, little is known about OpenAI’s hardware initiatives, although The Information reports that the company is developing a HomePod-style smart speaker.

The lawsuit underscores the fierce competition in the rapidly growing AI hardware market. Apple aims to integrate AI functionalities into its ecosystem of hardware, while OpenAI is pursuing devices powered by its proprietary AI models.

Internal Links

For more on Apple’s competitive strategy in the smart speaker market, see the article “Google’s New Home Speaker Falls Short of 6-Year-Old Nest Audio in Sound Quality.” For details on optimizing cache management in the Linux kernel to accelerate AI-related workloads, refer to “Linux Cache-Aware Scheduling Extensions Boost MySQL Performance by Up to 360%.”

Editorial Opinion

In the short term, this lawsuit is likely to have a significant impact on the hiring strategies of both companies. OpenAI, in particular, has actively recruited former Apple employees to expand its hardware division, and the outcome of this lawsuit could restrict its future hiring practices. The case also reignites a broader debate among major tech companies about the balance between hiring competitors’ employees and protecting trade secrets.

From a long-term perspective, the lawsuit could influence the development of the AI hardware market itself. If Apple’s allegations of systemic information leaks are proven, OpenAI’s hardware development efforts may face delays. At the same time, the tech industry has normalized the movement of talent and knowledge transfer between companies, suggesting that this case could have far-reaching implications for industry practices regardless of its outcome.

The editorial team views the main issue in this case as the challenge of balancing trade secret protection with fostering competition in the uncharted territory of AI hardware. Key points to watch will include whether Apple can substantiate its claims of “show-and-tell” practices and how broadly the court interprets the scope of trade secrets.

References

• ” Apple sues OpenAI over alleged theft of trade secrets — claims company mentored incoming employees on bringing confidential information ”, by Andrew E. Freedman — Tom’s Hardware, 2026-07-10T21:59:42.000Z (ARR)
• Source URL: https://www.tomshardware.com/tech-industry/big-tech/apple-sues-openai-over-alleged-theft-of-trade-secrets-claims-company-mentored-incoming-employees-on-bringing-confidential-information