Apple Sues OpenAI and Ex-Staff Over Alleged Trade Secret Theft

Key Takeaways

• Apple has initiated a federal lawsuit against OpenAI, alleging a systematic scheme to pilfer confidential trade secrets related to hardware design and manufacturing.
• The complaint names OpenAI, its hardware subsidiary io Products, Chief Hardware Officer Tang Yew Tan, and former senior systems electrical engineer Chang Liu as defendants.
• Allegations include the use of former Apple employees to extract sensitive information, the exploitation of an undisclosed authentication flaw, and the unauthorized use of proprietary manufacturing processes.
• Apple seeks to prevent further alleged misappropriation and highlights the intensifying competition as OpenAI ventures into consumer hardware.

Apple Alleges Systematic Trade Secret Theft by OpenAI and Former Staff

Apple has launched a federal lawsuit accusing OpenAI of orchestrating a comprehensive campaign to misappropriate proprietary information, including confidential hardware designs, manufacturing processes, and critical supplier relationships. The tech giant claims this alleged scheme was executed through more than 400 former Apple employees who have since joined OpenAI.

Filed on July 10, 2026, in the U.S. District Court for the Northern District of California, The 41-page complaint identifies OpenAI, its hardware division io Products, Chief Hardware Officer Tang Yew Tan, and former senior systems electrical engineer Chang Liu as the defendants. Apple asserts that the alleged illicit activities permeate “every level, from members of its Technical Staff to its Chief Hardware Officer,” as OpenAI aggressively pursues the development of its own consumer hardware device.

Allegations Against Key Individuals

Tang Yew Tan, who previously served 24 years at Apple, most recently as Vice President of Product Design for iPhone and Apple Watch, is accused of leveraging his intimate knowledge of confidential Apple projects. The lawsuit claims Tan used this insider information during job interviews with current Apple employees to extract further sensitive details. Specifically, he allegedly employed internal project codenames to inquire about “What’s the plan[?]” for unannounced Apple products. Furthermore, the complaint states that Tan directed candidates to bring “actual parts” from Apple offices for “show and tell” sessions, a request that reportedly surprised at least one candidate who expressed unawareness of the permissibility of removing such items.

The complaint further alleges that Tan possessed and distributed an internal “Need to Know” document. This document, detailing Apple’s offboarding and security procedures, is said to have provided new OpenAI hires with advance knowledge of the forensic examinations they would encounter upon their resignation from Apple.

Chang Liu, who transitioned from Apple to OpenAI in January 2026, is accused of retaining an Apple-issued laptop post-departure. He allegedly informed a former colleague that he “still have[d] another computer” for accessing company data. Apple claims Liu exploited a previously unknown authentication vulnerability to maintain access to Apple’s network storage. Subsequently, he is said to have downloaded dozens of confidential files, including an extensive compilation exceeding a thousand pages of engineering work and a presentation detailing manufacturing and testing procedures for multi-layer main logic boards.

Instead of reporting the vulnerability, Apple contends that Liu made light of it in messages, using phrases like “LOL” and “so funny.” He is also implicated in coaching a colleague, identified in related reports as Alyssa Peng, on which confidential materials to review prior to her OpenAI interview and methods for removing files without alerting Apple’s security team.

Broader Pattern of Misappropriation

Beyond individual actions, Apple alleges that OpenAI misled a long-standing manufacturing partner into performing Apple’s proprietary metal-finishing technique without authorization. Separately, OpenAI reportedly approached a battery and power supplier, using insider terminology to probe for details on specific Apple components.

Apple states it has observed a consistent pattern of departing employees intentionally circumventing exit security reviews, which it attributes to coaching from OpenAI on how to evade scrutiny.

Legal and Industry Implications

The lawsuit primarily focuses on claims of trade secret misappropriation and breach of contract. Apple seeks to halt what it characterizes as an ongoing pattern rather than an isolated incident. This case underscores the escalating competitive tensions between Apple and OpenAI as the artificial intelligence firm expands its footprint into the consumer hardware market.

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