Apple Sues OpenAI Over Alleged Theft of iPhone Trade Secrets

Apple has filed a lawsuit against OpenAI and two former employees, accusing them of misappropriating confidential information to support OpenAI’s expansion into consumer hardware.

The case was filed on Friday in the US District Court for the Northern District of California. It names former Apple employees Tang Yew Tan and Chang Liu, along with OpenAI Foundation, OpenAI Group PBC and io Products, as defendants.

Apple Alleges Coordinated Theft

Apple claims its former employees took trade secrets for OpenAI’s benefit and that the alleged conduct extended across different levels of the AI company’s hardware division.

The 41-page complaint accuses OpenAI of encouraging Apple employees it was recruiting to discuss confidential projects and share protected hardware information. Apple also alleges that some candidates were told how to avoid attracting scrutiny during the recruitment process.

OpenAI said it was reviewing the filing and maintained that it had no interest in the trade secrets of other companies.

Former Engineer Accused of Downloading Files

One of the defendants, Chang Liu, previously worked as a senior system electrical engineer at Apple before joining OpenAI.

Apple alleges that Liu failed to return a company-issued laptop after leaving. The lawsuit claims he later exploited an authentication flaw to access Apple’s internal network and download dozens of confidential files related to hardware development.

Apple said Liu had been trusted with highly sensitive product-development work during his time at the company.

Hardware Chief Also Named

The lawsuit also names Tang Yew Tan, a former Apple vice president involved in designing products including the iPhone, Apple Watch, and iPod. Tan is now OpenAI’s chief hardware officer.

Apple alleges that Tan emailed himself information about suppliers and internal industry reports before leaving the company.

The complaint also claims Tan encouraged Apple employees applying for jobs at OpenAI to bring physical components and discuss confidential projects during interviews.

OpenAI Expands Into Hardware

OpenAI acquired io Products last year as part of its effort to develop consumer AI hardware. The startup was co-founded by former Apple design chief Jony Ive, Tan, and other executives.

OpenAI has not clearly disclosed what type of device it plans to release. It has only described the project as a new way of interacting with artificial intelligence beyond traditional products and interfaces.

Apple claims OpenAI’s hardware work partly relies on confidential designs, manufacturing knowledge, and supply-chain information taken from Apple.

Partnership Turns Into Rivalry

The lawsuit marks a major deterioration in the relationship between Apple and OpenAI. The companies previously worked together to integrate ChatGPT into Apple devices, allowing Siri to direct certain requests to OpenAI’s chatbot. Apple users were also given the option to access ChatGPT through Apple’s software.

However, their relationship has moved closer to direct competition as OpenAI prepares to enter the consumer hardware market.

Apple said it contacted OpenAI in February after discovering possible leaks of confidential information, but received no response.

The company is seeking damages and a court order preventing the defendants from continuing to use its alleged trade secrets. The claims remain allegations and have not yet been proven in court.