In a stunning legal escalation, Apple has filed a federal lawsuit against OpenAI, accusing the ChatGPT maker of orchestrating a systematic campaign to steal trade secrets — from hardware designs to supplier relationships — involving more than 400 former Apple employees.
The complaint, filed on July 10 in the Northern District of California, marks a dramatic reversal for two companies that partnered in 2024 to integrate ChatGPT into the iPhone. What began as a high-profile collaboration has turned into one of the biggest legal battles in Silicon Valley.
What Apple Alleges
Apple’s 50-page complaint paints a picture of what it calls “systematic” theft “at every level.” The central figure is Tang Yew Tan, a former Apple vice president who spent nearly 25 years at the company overseeing iPhone and Apple Watch product design. Tan left to co-found IO Products — the hardware startup founded with ex-Apple design chief Jony Ive — which OpenAI acquired for a staggering $6.4 billion in 2025.
According to Apple, Tan allegedly forwarded Apple supplier information to his personal email before leaving, coached departing employees on how to bypass Apple’s security exit procedures, and directed job candidates to bring unreleased Apple hardware — including batteries, logic boards, and System-in-Package modules — to interviews as “show and tell.”
Another defendant named in the suit is Chang Liu, a senior systems electrical engineer who allegedly kept an Apple-issued laptop after joining OpenAI and used it to download confidential technical documents. Apple also claims OpenAI demonstrated a proprietary Apple metal-finishing technique to a manufacturing partner while misleading the partner into believing Apple had approved.
OpenAI Fires Back
“We have no interest in other companies’ trade secrets. We remain focused on building innovative technology that empowers people everywhere,” an OpenAI spokesperson told CNBC.
OpenAI hasn’t formally announced its hardware products, but Sam Altman confirmed in November that the company had finished its first prototypes. Reports suggest a screenless wearable and a smart speaker with a camera are in the pipeline, with parts of the lineup potentially launching by late 2026 or early 2027.
A Critical Moment
The lawsuit lands at a pivotal time for both companies. Apple is in the midst of a leadership transition — Tim Cook is set to become Executive Chairman on September 1, with hardware chief John Ternus taking over as CEO. For OpenAI, which is gearing up for what’s expected to be a historic IPO, mounting legal troubles add another layer of risk.
Apple is seeking damages, injunctions, and a court order to force OpenAI to stop using its trade secrets. If an early injunction is granted, it could seriously delay OpenAI’s hardware ambitions.
FAQ
Why is Apple suing OpenAI if they were partners?
The partnership soured when OpenAI announced its own hardware ambitions. What began as a collaboration (ChatGPT on iPhone) turned into a competitive threat when OpenAI started building consumer devices, directly poaching Apple’s top hardware talent and allegedly taking secrets with them.
How many former Apple employees are at OpenAI?
Apple claims more than 400 of its former employees now work at OpenAI, including senior leadership from its hardware division.
What hardware is OpenAI building?
While unannounced, reports describe a screenless wearable AI device and a smart speaker with a camera, with prototypes already completed. The first device could launch before the end of 2026.
Could this affect ChatGPT on iPhone?
Apple hasn’t commented on whether the lawsuit will affect the existing ChatGPT integration with Apple Intelligence, but the legal tensions raise questions about the future of the partnership.
This story is developing. Check back for updates as the court proceedings unfold.