Apple has launched a sweeping legal challenge against OpenAI, accusing the artificial intelligence company and two former senior Apple employees of unlawfully using confidential information to speed up the development of consumer hardware products.
The lawsuit, filed in the U.S. District Court for the Northern District of California, alleges that OpenAI engaged in a coordinated effort to obtain Apple’s proprietary designs, manufacturing techniques and supplier knowledge through former employees and business relationships. According to Apple, the alleged conduct was aimed at giving OpenAI an advantage as it expands beyond software and into AI-powered consumer devices.
OpenAI rejected the accusations, saying it has no interest in using another company’s trade secrets and remains focused on creating innovative technology that benefits users.
The legal battle marks a significant escalation in the increasingly strained relationship between the two companies. Once collaborators on AI features, Apple and OpenAI are now emerging as potential competitors in the race to define the next generation of consumer devices beyond the smartphone.
Industry observers believe OpenAI is developing its own hardware ecosystem that could eventually reduce reliance on traditional smartphones, posing a long-term challenge to Apple’s iPhone business.
Former Apple executives at the center of dispute
Apple’s complaint names Chang Liu, a former senior system electrical engineer, and Tang Yew Tan, the company’s former vice president of product design responsible for major iPhone and Apple Watch projects.
According to the filing, Liu failed to return an Apple-issued laptop after leaving the company and later exploited what Apple describes as an authentication flaw to access its internal network. The company claims he downloaded numerous confidential hardware-related documents after his departure.
Apple also alleges that Tan, who spent nearly 24 years at the company, transferred confidential information to himself before joining OpenAI. The lawsuit claims the material included supplier information and internal industry analyses that could benefit OpenAI’s hardware ambitions.
In one of the more striking allegations, Apple says Tan encouraged prospective OpenAI hires from Apple to bring physical components from their workplace to interviews for informal “show and tell” discussions.
Neither former employee immediately commented on the allegations.
Apple says confidential know-how was used to accelerate hardware plans
The lawsuit also names OpenAI Foundation, OpenAI Group PBC and io Products, the hardware startup acquired by OpenAI last year in a $6.5 billion deal.
Apple contends it contacted OpenAI in February to express concerns that its confidential information was being used by the AI company, but says it received no response.
The filing notes that more than 400 former Apple employees are now working at OpenAI. While Apple acknowledges that hiring former employees is lawful, it argues that possessing confidential knowledge does not grant permission to use proprietary information in developing competing products.
Apple further claims that OpenAI personnel sought sensitive manufacturing information through Apple suppliers. One allegation involves a supplier carrying out a specialized metal-finishing process under the assumption that OpenAI had authorization from Apple.
High-stakes case for the future of AI hardware
Legal experts say the dispute could become one of the most closely watched technology lawsuits in recent years.
They note that California law generally allows employees to move freely between competitors, making talent recruitment alone unlikely to create liability. However, if evidence shows confidential documents or trade secrets were transferred and subsequently used, the legal consequences could be substantial.
The case may also break new ground because many recent AI-related intellectual property disputes have focused on software and training data, whereas Apple’s claims center on hardware engineering, manufacturing processes and supply-chain expertise.
Partnership gives way to rivalry
The lawsuit arrives amid growing friction between the two companies despite their ongoing partnership.
Apple introduced ChatGPT integration into its ecosystem in 2024, allowing Siri to access OpenAI’s chatbot and enabling iPhone users to subscribe to ChatGPT services directly through iOS. Apple also recently rolled out its long-awaited overhaul of Siri as part of its broader artificial intelligence strategy.
Meanwhile, OpenAI has been expanding aggressively into hardware. Its acquisition of io Products—founded by former Apple design chief Jony Ive—signaled its intention to move beyond AI software and develop dedicated consumer devices. Although Ive is closely associated with the venture, he is not named as a defendant in Apple’s lawsuit.
The court fight now sets the stage for a broader contest over who will shape the next era of AI-powered personal technology, with both companies seeking to define how consumers interact with artificial intelligence in the years ahead.
