Apple sues OpenAI for alleged trade secret theft in hardware push

Apple just filed a federal lawsuit against OpenAI, alleging the AI company ran a coordinated operation to steal trade secrets related to hardware designs, manufacturing processes, and upcoming product launches. The suit, filed in the US District Court for the Northern District of California, reads less like a standard IP dispute and more like a corporate espionage thriller.

The lawsuit names two former Apple employees as co-defendants: Tang Yew Tan, who spent 24 years at Apple and now serves as OpenAI’s Chief Hardware Officer, and Chang Liu, an ex-Apple electrical engineer accused of walking out the door with confidential files. Apple claims their departures weren’t coincidental but part of a broader, deliberate scheme to gut Cupertino’s competitive advantage and hand it to OpenAI on a silver platter.

The allegations paint a pretty damning picture

Apple claims OpenAI asked candidates to share prototypes and confidential technical details before they were even hired. The lawsuit also alleges that security protocols were manipulated or bypassed to extract sensitive design documents and supplier information.

Apple’s legal filing describes what it characterizes as a multi-level, coordinated theft operation, suggesting that the alleged misconduct wasn’t the work of a couple of rogue employees but reflected institutional intent at OpenAI.

OpenAI has been making no secret of its ambitions in consumer hardware. The company has committed roughly $6.5 billion in investment linked with io Products as part of its push into physical devices.

A partnership gone very sour

Apple and OpenAI were, until recently, partners. The two companies struck a deal to integrate ChatGPT into Apple’s devices, giving OpenAI prime real estate on hundreds of millions of iPhones and iPads. That relationship had already been deteriorating over concerns about talent poaching and growing competitive overlap.

Tang Yew Tan’s case is particularly notable given his tenure. Spending 24 years at Apple means he would have had deep institutional knowledge spanning multiple product generations, supply chain relationships, and manufacturing methodologies.

Apple’s stock showed relative stability in after-hours trading following news of the filing.

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