Apple accuses OpenAI of theft
by Mark Gurman
Apple Inc. sued OpenAI for trade secret theft, accusing the artificial intelligence startup and its hardware chief of engaging in a coordinated campaign to steal information about upcoming products.
The iPhone maker said in a lawsuit Friday that OpenAI encouraged Apple employees to share information, components, images and other materials related to upcoming products — part of efforts by the AI ​​company to develop its own devices.
As part of the lawsuit filed in the Northern District of California, Apple has also named Tang Tan, OpenAI’s chief hardware officer. He was previously Apple’s vice president of product design, heading development of the iPhone, smartwatches, AirPods, and many other offerings in the company’s hardware engineering division.
In a statement, OpenAI said it had “no interest in other companies’ trade secrets.”
“We’re focused on building innovative technology that empowers people everywhere,” said a spokesperson for the San Francisco-based company.
The legal battle represents a dramatic turn for two companies that have worked as close partners in recent years. OpenAI, the creator of the ChatGPT chatbot, has provided key technology to the Apple Intelligence platform and the Siri digital assistant. But tensions have been rising over the past year — made even worse by OpenAI’s involvement of former Apple design visionary Jony Ive to help develop the device.
OpenAI, which is set for an initial public offering in the coming months, has attracted a large number of Apple employees. According to the lawsuit, more than 400 former Apple employees are now at OpenAI.
“At every level, from members of its technical staff to its chief hardware officer and in coordination with business partners, OpenAI is stealing Apple’s trade secrets and confidential information,” the Cupertino, California-based tech giant said in the lawsuit. “As a natural consequence, OpenAI’s nascent hardware business now rests on the weakest foundation, which has completely rotted due to its illegal reliance on misappropriated trade secrets.”
Apple is demanding that OpenAI cease its practices and destroy any proprietary material. Apple, which is seeking a jury trial in the case, also wants OpenAI to redesign upcoming products so that they do not include any of its technology.
Apple said Tan encouraged employees to reveal information about upcoming products in job interviews. The lawsuit also names Chang Liu, a former iPhone hardware engineer, and says he provided the material. Liu joined OpenAI in January.
According to the lawsuit, “Over several weeks, while developing hardware for OpenAI, Mr. Liu secretly accessed and downloaded dozens of Apple’s confidential hardware-related files, which contained large, detailed information about unreleased products, engineering presentations, technical specifications, and proprietary project data.”
Apple said its employees were “actively trained” by OpenAI on how to handle his exit from the company.
According to the lawsuit, “OpenAI advised departing employees not to disclose their next employer and how to avoid ‘dangerous walk outs’ that would immediately fire them from the company, rather than giving them the standard two-week window in which they could continue to access Apple’s confidential information and trade secrets.”
The case highlights the importance of next-generation AI tools for Silicon Valley. Apple, OpenAI, Meta Platform Inc. and others are all racing to develop new gadgets that put artificial intelligence at the center, aiming to prepare for a post-smartphone future.
Apple is working on various devices like smart glasses, pendants, and camera-equipped AirPods — all part of its effort to adapt to the AI ​​age.
Tan originally left the iPhone maker in 2024 to co-found an AI device startup called io Products Inc. with Ive and Apple design veteran Evans Hankey. OpenAI acquired the startup last year for $6.5 billion. Ivey and Hankey are not named in the lawsuit.
Apple said it had attempted to settle the OpenAI dispute out of court months ago, and asked it to cease efforts and eliminate any proprietary content. It said it did not receive any response, which led Apple to file a lawsuit.
“Significant evidence has emerged that individuals employed by OpenAI improperly obtained Apple’s secret and confidential information regarding our unreleased technologies, processes, and products,” the company said in a statement.
As part of the defection to OpenAI, the top executive in charge of Apple’s smart glasses effort left last month.
Although the two companies never partnered to develop hardware devices, they have worked together on AI features used by the iPhone and other products. That relationship was announced two years ago at Apple’s Worldwide Developers Conference, with OpenAI CEO Sam Altman sitting in the audience. At the time, Apple software chief Craig Federighi referred to the startup as a “pioneer and market leader” in AI and the companies seemed ready for a broader strategic partnership.
This arrangement lets users access ChatGPT results within Siri and tap AI technology to generate text and analyze surrounding objects through the iPhone’s Visual Intelligence feature. The partnership later expanded, with Apple adding ChatGPT to its Image Playground app as an option for creating images and analyzing on-screen content.
But relations have also soured over ChatGPT in Siri. Bloomberg News reported earlier this year that OpenAI was considering its legal options against Apple. People familiar with the matter said the AI ​​startup failed to see expected benefits from the partnership and considered sending a breach of contract notice.
