Apple Sues OpenAI Over Trade Secrets, Alleging Misconduct Reaching Top Ranks

Apple filed a trade secrets lawsuit against OpenAI last Friday, alleging a coordinated effort by the AI company to systematically extract confidential information from current and former Apple employees. The 41-page complaint, filed in the U.S. District Court for the Northern District of California, alleges misconduct reaching all the way up to OpenAI's chief hardware officer Tang Yew Tan, who spent 24 years at Apple as VP of product design for iPhone and Apple Watch. The lawsuit claims that more than 400 former Apple employees now work at OpenAI.

The complaint details what Apple describes as a systematic pattern of trade secret theft. In one striking allegation, a former Apple senior systems electrical engineer texted "I still have another computer" within hours of leaving the company, suggesting continued unauthorized access. Apple also alleges that OpenAI instructed job candidates still working at Apple to bring "actual parts" and "CAD/design artifacts" from Apple to their interviews, and coached departing employees on how to evade Apple's security exit procedures.

Apple's lawsuit specifically targets OpenAI's hardware ambitions. The complaint describes OpenAI's hardware business as "resting on the shakiest of foundations, rotten to its core by its illegal reliance on misappropriated trade secrets." OpenAI has been reported to be developing hardware devices including a possible smartphone that would compete directly with the iPhone. Apple also alleges that OpenAI misled a manufacturing partner into believing it had Apple's permission to use a proprietary metal-finishing technique.

OpenAI responded publicly with a statement saying it has "no interest in other companies' trade secrets" and remains focused on building innovative technology. However, Apple noted that it first raised concerns with OpenAI in February and never received a response. Apple is asking the court to bar OpenAI from using or disclosing its trade secrets and to return all confidential materials.

The legal battle could significantly impact OpenAI's reported IPO timeline. The company has been one of the most valuable private AI companies, and a high-profile lawsuit from the world's most valuable public company introduces substantial legal risk. Legal experts note that the discovery process could be especially damaging for OpenAI, as internal communications and emails may reveal the full scope of the alleged misconduct. Apple's complaint warns that "this is the tip of the iceberg" and that discovery will show the misappropriation has occurred "on a scale many times greater" than described so far.

Notably, the lawsuit also names io, a hardware design firm founded by former Apple chief designer Jony Ive, which OpenAI acquired last year in a $6.5 billion deal to bolster its hardware strategy. Apple alleges that io used Apple's proprietary industrial design techniques by misleading an Apple partner.

As the case proceeds, markets will watch closely how OpenAI navigates this legal challenge and whether Apple seeks an injunction to halt the use of allegedly stolen technology. The outcome could set important precedents for trade secret protection and hiring practices across the AI industry.