Apple sues OpenAI over alleged trade-secret theft in AI hardware race

Apple has filed a lawsuit charging OpenAI with misappropriating its trade secrets while the ChatGPT developer races to create its own consumer hardware — a sharp turn for two companies that only recently worked as allies.

The complaint, lodged Friday in a United States federal court in California, alleges that OpenAI pressed Apple staff it was courting to hand over confidential material and coached them on how to leave without drawing attention.

“This case is about Apple’s former employees stealing Apple’s trade secrets for the benefit of OpenAI,” the filing states. “Apple brings this suit to put a stop to it.”

Two former Apple workers now employed by OpenAI are also listed as defendants. Tang Tan, who contributed to the design of the iPhone, Apple Watch and iPod, serves as OpenAI’s chief hardware officer. Chang Liu, previously an electrical engineer whom Apple says held some of its most sensitive product-development information, left Apple for OpenAI earlier this year.

OpenAI said it was still examining the complaint. Spokesperson Drew Pusateri stated Friday that the company has “no interest in other companies’ trade secrets. We remain focused on building innovative technology that empowers people everywhere.”

OpenAI has not spelled out the exact form of device it is developing, describing the work instead as a bid to invent fresh ways people engage with artificial intelligence beyond “traditional products and interfaces.” The project sits within a wider industry drive to give advanced AI a physical presence — roughly ten years after Amazon and Google put speaker devices without screens in living rooms.

Apple contends that OpenAI’s hardware programme has leaned on information taken from Apple.

“OpenAI’s nascent hardware business now rests on the shakiest of foundations, rotten to its core by its illegal reliance on misappropriated trade secrets,” the lawsuit states.

According to Apple, an internal probe into whether confidential material had been exposed turned up what the company called a “pattern of theft” involving former staff who moved to OpenAI.

The suit says Liu and Tan continued to use Apple’s proprietary information and files after joining OpenAI. Apple alleges Liu retrieved and downloaded several confidential hardware documents from an Apple-issued machine he kept after leaving. It further claims Tan instructed candidates still employed by Apple to bring “Actual parts” belonging to Apple to interviews with OpenAI.

Apple says it contacted OpenAI in February as the inquiry was getting under way, but received no reply.

An Apple spokesperson said Friday that the company will “always defend our teams’ hard work and innovations, and we are taking all appropriate steps to do so.”

Apple turned to OpenAI several years ago after falling behind in the generative-AI surge that followed ChatGPT’s debut. In 2024 the pair teamed up so ChatGPT could act as an AI “answer engine” on the iPhone when Siri fell short. That alliance has since tilted toward competition.

In expanding its hardware ambitions, OpenAI brought on former Apple designer Jony Ive to lead work on an AI device that many market watchers think could one day rival Apple’s offerings.

OpenAI disclosed last year that it was mounting a confidential hardware effort with Ive aimed at reshaping how people talk to AI systems. As part of that push, it bought io Products — a product and engineering firm co-founded by Ive, Tan and two others — in a transaction valued at nearly US$6.5 billion.

That deal prompted little-known startup iyO Inc. to sue Ive and OpenAI chief executive Sam Altman for trademark infringement, citing the near-identical name and earlier dealings between the parties. iyO also sued a former staff member for allegedly leaking a confidential sketch of its unreleased product, and later lodged trade-secret claims against Tan as well.

Apple’s action also names io Products as a defendant. Counsel who formerly acted for that company and for Tan directed The Associated Press to OpenAI for comment.

The litigation arrives as OpenAI studies a possible Wall Street listing and contends with tougher rivalry from Anthropic and Google.

Earlier this year OpenAI scaled back certain side ventures to concentrate on ChatGPT, yet it has kept hardware in its plans, the company’s chief financial officer told the AP this spring.

“We have consumer hardware that will come towards the end of this year,” CFO Sarah Friar told the news agency in April.

Reporting by The Associated Press.