Apple Targets OpenAI’s Hardware Launch With Trade Secrets Suit

  • Apple is not merely seeking compensation for alleged data theft. It is asking a federal court for remedies that could disrupt how OpenAI designs, supplies, and launches its first consumer hardware products.

Apple filed a 41-page complaint against OpenAI, its io Products hardware unit, and former Apple employees Chang Liu and Tang Yew Tan, alleging that the latter built shortcuts into its recruiting, engineering, and supplier operations to obtain knowledge accumulated through Apple’s decades of consumer-device manufacturing.

The iPhone maker is asking a federal court to restrict OpenAI’s possession and use of contested information, compel the return of Apple property, preserve evidence, and potentially place parts of OpenAI’s product-development operation under judicial scrutiny.

OpenAI has denied the broader accusation. Drew Pusateri, the company’s director of strategic communications, said OpenAI has “no interest in other companies’ trade secrets” and remains focused on building technology that empowers users. The defendants have not yet filed their formal responses in court.

The case was filed in the Northern District of California under the federal Defend Trade Secrets Act and includes breach-of-contract claims against Liu and Tan. Apple demanded a jury trial.

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Apple does not limit its allegations to drawings for a single unreleased device. It identifies five broad categories of purported trade secrets, including hardware architecture, manufacturing techniques, component technology, testing methodologies, and global supplier operations.

Those categories cover much of the infrastructure required to turn a prototype into a mass-market product.

Apple argues that competitors could use such information to avoid years of experimentation, reduce development costs, identify specialist suppliers, solve manufacturing problems faster, and accelerate commercialization. The complaint describes Apple’s interconnected engineering and supply-chain knowledge as a trade secret in its own right.

The requested monetary relief includes compensation for actual losses, recovery of alleged unjust enrichment, a reasonable royalty, exemplary damages for allegedly willful conduct, interest, attorneys’ fees, and costs. Apple did not quantify those claims.

Apple’s case alleges that OpenAI transformed recruitment from Apple into a mechanism for acquiring proprietary information. Tan spent 24 years at Apple and most recently served as vice president of product design for the iPhone and Apple Watch, according to the complaint. He is now OpenAI’s chief hardware officer.

The tech firm alleges that Tan used internal Apple project code names while interviewing candidates and asked questions about unreleased products. The company further claims that candidates were instructed to prepare detailed technical presentations and bring “actual parts,” prototypes, computer-aided design materials, batteries, circuit boards, housings, and other components from their Apple work.

One candidate allegedly expressed surprise that employees could remove such materials from Apple’s offices.

Apple says the interview process also sought information about component selection, simulation tools, system integration, vendors, and supplier communications. The complaint describes one instance in which an Apple employee allegedly began downloading and screenshotting files related to a confidential project hours before an interview with Tan. Apple claims Tan then asked about the same project during the interview.

The allegations against Liu provide Apple’s most detailed account of purported file removal. Liu worked at Apple for more than eight years as a senior system electrical engineer before leaving for OpenAI in January 2026.

Apple claims he failed to return at least one company computer and later discovered that a previously unknown authentication flaw allowed him to access Apple’s network storage after his departure.

Instead of reporting the flaw, Liu allegedly messaged a former colleague, “LOL, I found out I can access the [network storage], so funny.”

The firm says Liu downloaded dozens of confidential files while employed by OpenAI, including technical presentations, specifications, spreadsheets, and a compilation exceeding 1,000 pages. One presentation allegedly covered the manufacture and testing of multilayer or main logic boards, including equipment, workflows, diagnostic methods, photographs, and analyses.

The company says it terminated the access after discovering the vulnerability.

Apple also alleges that Liu coached another employee on how to copy files while avoiding scrutiny, recommended confidential materials to study before an OpenAI interview, and moved some communications to the LINE messaging application to reduce the risk of detection.

The lawsuit reaches beyond personnel and internal files into Apple’s manufacturing network. Apple alleges that OpenAI or io persuaded an Apple partner to perform a proprietary metal-finishing process for OpenAI’s benefit. According to the complaint, the partner was subject to agreements restricting its use of certain Apple-developed processes and facilities.

Apple claims the partner was led to believe OpenAI had permission to request the work. Apple says no permission was granted.

The complaint separately alleges that OpenAI contacted another Apple supplier involved in power and battery manufacturing. OpenAI personnel allegedly used Apple-specific terminology to ask targeted questions about confidential components.

Apple and OpenAI still have a commercial relationship involving ChatGPT’s integration with Apple Intelligence. The complaint explicitly says that agreement is not part of the dispute.

The legal action nevertheless shows how quickly their interests have diverged. Apple says more than 400 former employees now work at OpenAI.

It says it contacted OpenAI in February 2026 and asked the company to investigate whether confidential information was entering its business. Apple alleges that OpenAI did not respond.

Information for this briefing was found via the sources and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
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