Apple Sues OpenAI Over Alleged Theft of Trade Secrets

Apple has sued OpenAI and two former employees, accusing the ChatGPT maker of orchestrating a campaign to obtain the iPhone maker’s confidential information to accelerate its AI hardware ambitions.

Following its acquisition of Jony Ive’s io startup, OpenAI has been building a dedicated hardware division staffed by several former Apple executives and engineers to develop AI-native consumer devices beyond smartphones. 

“Apple has uncovered a pattern of theft of Apple’s trade secrets by OpenAI employees who were formerly at Apple,” the company said in its filing.

The lawsuit was filed on Friday in the US District Court for the Northern District of California. It names OpenAI and former Apple executives Tang Tan and Chang Liu, alleging that Apple’s trade secrets were misappropriated to benefit OpenAI’s consumer hardware efforts.

OpenAI denied Apple’s allegations. “We have no interest in other companies' trade secrets. We remain focused on building innovative technology that empowers people everywhere,” the company said in a statement.

According to the complaint, Tan, who spent nearly 24 years at Apple before becoming OpenAI’s Chief Hardware Officer, allegedly encouraged Apple employees and job candidates to disclose confidential information, including supplier relationships, unreleased hardware details and physical components during recruitment conversations. 

“He has directed job candidates still working for Apple to bring ‘Actual parts' from Apple to their interviews for ‘show and tell’ sessions in which he and his team at OpenAI can elicit still more Apple confidential information,” the company wrote in the filing.

Apple also alleges that Liu exploited a software bug that allowed him continued access to Apple’s internal systems after leaving the company, downloading confidential documents and retaining company property.

“After leaving Apple, Mr Liu failed to return an Apple-issued work laptop that he had previously authenticated to Apple’s network,” Apple wrote in its complaint.

Apple claims OpenAI ignored concerns it raised earlier this year and that the alleged conduct went beyond isolated incidents “This case is about OpenAI’s systematic campaign to obtain Apple’s trade secrets,” it said.

The company further alleged that what it had uncovered was “only the tip of the iceberg,” accusing OpenAI of fostering “institutional misconduct” around confidential information.

The lawsuit seeks unspecified monetary damages and a court order preventing OpenAI and the former employees from using or disclosing Apple’s confidential information. Apple is also asking the court to require the return or destruction of any trade secrets allegedly taken from the company.

The legal battle marks a dramatic deterioration in the relationship between the two companies. Apple and OpenAI announced a high-profile partnership in 2024 that integrated ChatGPT into Apple Intelligence across iPhone, iPad and Mac devices. 

The case adds to a growing list of legal challenges facing OpenAI. The company is also facing several ongoing copyright lawsuits from authors, publishers and media organisations, including The New York Times, which alleges that OpenAI and Microsoft used millions of its copyrighted articles without permission to train AI models.

OpenAI also recently prevailed in a high-profile lawsuit brought by co-founder Elon Musk, who accused the company of abandoning its original nonprofit mission in favour of commercial interests. Musk sought $150 billion in damages but has said he plans to appeal the ruling.