Apple Sues OpenAI Over Systematic Hardware Trade Secret Theft

On July 10, 2026, Apple Inc. filed a lawsuit in the U.S. District Court for the Northern District of California against OpenAI, its hardware subsidiary io Products, and former employees Tang Yew Tan and Chang Liu. Apple alleges a systematic corporate espionage campaign to steal trade secrets regarding unreleased hardware, manufacturing processes, and supply chain strategies to accelerate OpenAI's entry into the consumer hardware market.

The complaint details a coordinated effort involving the recruitment of over 400 former Apple employees. Apple specifically accuses Tang Yew Tan, OpenAI's Chief Hardware Officer, of directing job candidates to bring physical prototypes and confidential designs to interviews for "show and tell" sessions. Additionally, Apple alleges that engineer Chang Liu exploited an authentication bug to download thousands of technical files from Apple's internal servers after his departure. The suit also claims OpenAI used a checklist to help recruits evade security protocols and misled a manufacturing partner to steal a proprietary metal-finishing technique.

OpenAI has denied the allegations, asserting it has "no interest in other companies’ trade secrets" and that the complaint lacks merit. The legal battle follows the deterioration of a 2024 partnership to integrate ChatGPT into Siri. Meanwhile, OpenAI is developing a screenless, portable AI companion with former Apple designer Jony Ive, intended for a 2027 release. The litigation creates significant financial risk for OpenAI's planned initial public offering and has contributed to S&P Global Ratings downgrading Oracle's debt to BBB- due to its heavy financial ties to OpenAI. The case was recently reassigned to U.S. District Judge Edward Davila.