Apple Sues OpenAI Over Alleged Trade Secret Theft in Consumer Hardware Push

In what is shaping up to be the most explosive corporate conflict in Silicon Valley this year, Apple has filed a blockbuster federal lawsuit against OpenAI, its hardware subsidiary io Products, and two key technical employees. The 41-page complaint, filed in the U.S. District Court for the Northern District of California, accuses the artificial intelligence pioneer of orchestrating a systematic and coordinated campaign to steal Apple's highly sensitive hardware trade secrets.

According to the court documents, OpenAI's alleged misconduct was driven by a desire to rapidly jump-start its own upcoming consumer hardware business. Last year, OpenAI acquired Jony Ive's hardware startup, io Products, in a deal worth approximately $6.5 billion. However, Apple alleges that OpenAI's hardware foundation is ‘rotten to its core’ due to an illegal reliance on stolen intellectual property.

Poaching, ‘Show and Tell’ Interviews, and Exploited Bugs

The lawsuit details shocking allegations of corporate espionage and coordinated misconduct at an institutional level. The complaint names two former Apple employees who now work for OpenAI: Tang Yew Tan, Apple's former Vice President of Product Design for the iPhone and Apple Watch (now OpenAI's Chief Hardware Officer), and Chang Liu, a former Senior System Electrical Engineer.

The Exploited Bug: Apple alleges that after leaving the company in January 2026, Chang Liu failed to return his Apple-issued work laptop. He then allegedly discovered a rare, previously unknown authentication vulnerability that allowed him to access Apple's internal network storage after his employment had ended. Instead of reporting the bug, Liu allegedly exploited it, texting a current Apple employee, “LOL, I found out I can access the [network storage], so funny.” He then allegedly downloaded dozens of highly confidential files containing proprietary specifications, engineering data, and unreleased product plans.
The ‘Show and Tell’ Interviews: Apple also accuses Tang Tan of leading a predatory recruitment campaign. According to the complaint, Tan instructed Apple employees interviewing at OpenAI to bring physical prototypes, components (such as battery designs, main logic boards, and systems-in-package), and proprietary design materials to their interviews for ‘show and tell’ sessions.
The 400-Employee Defection: The filing reveals that OpenAI now employs more than 400 former Apple workers. Apple states that they attempted to resolve these concerns quietly, sending a letter to OpenAI in February 2026, but the AI firm remained unresponsive, necessitating the legal action.

A Partnership Fractured

This lawsuit represents a stunning turnaround for the two companies. In 2024, Apple and OpenAI announced a landmark partnership to integrate ChatGPT directly into iOS and Siri. However, that relationship appears to have deteriorated completely. In its latest updates, Apple shifted away from OpenAI, partnering instead with Google to integrate Gemini AI models to power its Siri and Apple Intelligence features.

OpenAI spokesperson Drew Pusateri responded to the suit, stating, “We have no interest in other companies' trade secrets. We remain focused on building innovative technology that empowers people everywhere.”

Sources & References

Source Relevance Justification

The Guardian: Tier 1 global news publisher providing direct coverage of the filing, spokesperson statements, and the historical 2024 partnership context.
Axios: Tier 1 technology and business news outlet highlighting the strategic significance of OpenAI's hardware push and the talent drain.
Forbes: Tier 1 business publication detailing the specific engineering allegations, including the ‘show and tell’ interviews and the transition of Siri's AI power to Google's Gemini.
The Washington Post: Tier 1 general newspaper detailing the security bug exploitation by former engineer Chang Liu and OpenAI's Jony Ive connection.