Apple Sues OpenAI: Former Employees Accused of Stealing iPhone Secrets

TLDR

• Apple filed a federal lawsuit against OpenAI and two former employees on Friday
• Ex-Apple VP Tang Yew Tan and engineer Chang Liu are accused of taking confidential files
• Apple claims OpenAI used stolen hardware secrets to build its own consumer devices
• Apple says it raised concerns with OpenAI in February but received no response
• OpenAI denies wrongdoing, saying it has “no interest in other companies’ trade secrets”

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Apple filed a lawsuit on Friday against OpenAI, two former employees, and hardware startup io Products in the U.S. District Court for the Northern District of California.

$AAPL sued OpenAI in federal court, alleging trade secret theft tied to OpenAI’s consumer hardware push.

Apple named OpenAI hardware chief Tang Tan and former Apple engineer Chang Liu in the suit, alleging confidential hardware files and unreleased product materials were taken.… pic.twitter.com/qJKR7X6vDq

— Wall St Engine (@wallstengine) July 11, 2026

The suit accuses OpenAI of running a coordinated effort to gather Apple’s confidential information through hiring, supplier contacts, and internal document access.

The two former employees named are Tang Yew Tan, Apple’s former VP of product design for iPhone and Apple Watch, and Chang Liu, a senior electrical engineer. Tan spent 24 years at Apple before joining OpenAI as its chief hardware officer.

Apple Inc., AAPL

Apple says Liu failed to return a company laptop and used an authentication bug to download “dozens of confidential hardware-related files” from Apple’s internal network.

Tan is accused of emailing himself Apple supplier information and internal industry summaries before leaving the company.

Apple also claims that during job interviews, OpenAI told candidates to bring physical Apple parts for “show and tell” sessions. One candidate allegedly said they “didn’t even know we could take those from the office.”

OpenAI denied the allegations. Spokesman Drew Pusateri said the company is “focused on building innovative technology that empowers people everywhere.”

More than 400 former Apple employees now work at OpenAI, according to Apple’s filing. Apple states this does not give OpenAI the right to use their confidential knowledge.

The Stakes: AI Hardware and a Shifting Partnership

The lawsuit comes as OpenAI pushes into consumer hardware. OpenAI acquired io Products, a startup founded by former Apple designer Jony Ive, for $6.5 billion last year. Ive is not named in the suit.

OpenAI is expected to release its first hardware product, an AI keyboard, this month. Analysts believe the company is also working on a phone or other standalone device.

Apple and OpenAI had been partners. In 2024, Apple integrated ChatGPT into its devices through Siri. This year, Apple shifted more AI features to Google’s Gemini.

Stanford Law professor Mark Lemley said the case has the potential to be a “very big case,” but noted that hiring competitors’ employees is legal in California. However, he said taking confidential documents would be a problem for OpenAI.

Apple is asking the court to block OpenAI from using any alleged confidential information and is seeking unspecified financial damages.

Apple said its hardware business “now rests on the shakiest of foundations” if built on stolen trade secrets.

The lawsuit marks a sharp turn in what had been a working relationship between the two companies. Apple CEO Tim Cook is stepping down later this year. When he announced his departure in April, OpenAI’s Sam Altman called him “a legend.”