Apple Sues OpenAI for Alleged Theft of Trade Secrets in AI Hardware Development

Apple filed a federal lawsuit on Friday against OpenAI in the Northern District of California, accusing the AI company of systematically stealing trade secrets and intellectual property. The complaint alleges that OpenAI encouraged current and former Apple employees to share confidential information, components, drawings, and internal documents to aid OpenAI’s AI hardware product development. Apple claims this was a coordinated effort involving multiple levels of OpenAI staff, from technical workers to the head of its hardware division.

Central to the lawsuit are two former Apple employees now at OpenAI. Tang Tan, previously Apple’s Vice President of Product Design responsible for the iPhone and Apple Watch, currently leads OpenAI’s hardware division. Apple alleges Tan exploited his knowledge of secret projects to extract information from Apple employees during interviews, requesting physical Apple components and internal documents to help candidates bypass security protocols. Another defendant, Chang Liu, a former senior systems engineer at Apple who joined OpenAI earlier this year, is accused of downloading thousands of pages of confidential engineering documents and advising interviewees on which proprietary materials to study.

Apple also accuses OpenAI of approaching its longtime suppliers using internal information to obtain details about components and manufacturing processes. In one instance, OpenAI allegedly asked a supplier to use a metal finishing technique developed by Apple, implying it had Apple’s authorization. The lawsuit highlights that over 400 former Apple employees currently work at OpenAI, underscoring fierce competition for engineering talent.

The legal action marks a sharp deterioration in relations between the two companies, which had announced a collaboration earlier in 2024 integrating ChatGPT into Apple Intelligence and Siri. Relations soured after OpenAI acquired the company of former Apple designer Jony Ive for about $6.5 billion and accelerated its hardware ambitions. Meanwhile, Apple has shifted its next-generation Siri development to primarily use Google’s Gemini models. Apple states it first raised concerns with OpenAI in February, demanding an investigation and cessation of the alleged misuse, but received no response. OpenAI has yet to comment on the lawsuit.

This lawsuit adds to OpenAI’s challenges as it reportedly prepares for an initial public offering in the coming months.