Apple Sues OpenAI for Alleged Theft of Trade Secrets Amid Hardware Ambitions

Apple has filed a federal lawsuit in California accusing OpenAI of systematically stealing trade secrets related to sensitive, unreleased products still in development. This legal action marks a sharp escalation in tensions between the two tech giants, who had only recently formed a partnership in 2024 to integrate OpenAI's AI services into Apple devices and enhance Siri.

The lawsuit alleges that OpenAI recruited more than 400 former Apple employees, including key figures like Tang Yu Tan, former Apple VP of iPhone and Apple Watch design now OpenAI's hardware chief, and Chang Liu, a senior electrical engineer. Apple claims these employees brought confidential information and used unauthorized methods to access Apple's internal networks and proprietary documents. It also accuses OpenAI of misleading one of Apple's manufacturing partners into believing it had Apple's authorization to demonstrate a secret metal finishing technique.

The dispute intensified as OpenAI expanded into hardware, aiming to develop AI-based physical devices competing with the iPhone. OpenAI acquired IO Products, a design startup founded by former Apple design chief Jony Ive, bringing in a team of about 55 engineers and researchers. Apple describes this as a "dangerous leakage of minds and secrets." Despite Apple's warnings in February about confidential information potentially reaching OpenAI improperly, the company allegedly ignored these concerns.

Apple is now seeking a court injunction to prevent OpenAI from possessing or using its trade secrets, along with financial damages. This lawsuit follows a pattern of Apple litigating against former employees who join competitors, as seen in a 2019 case against ex-chip architect Gerard Williams. OpenAI responded by stating it is reviewing the lawsuit and firmly denies any interest in other companies' trade secrets, emphasizing its focus on building innovative technology that empowers people worldwide.