Apple recently filed a lawsuit against OpenAI, alleging that the company gained access to and misused confidential information related to its AI hardware efforts. Apple filed the complaint on July 10, 2026, in the U.S. District Court for the Northern District of California.
According to the complaint, Apple believes former employees retained sensitive internal information before joining OpenAI’s hardware initiative.
The lawsuit also names key individuals involved and outlines how Apple claims confidential engineering knowledge, product development details, and manufacturing information were taken and later connected to OpenAI’s expanding hardware plans.
While the allegations have not been proven in court and OpenAI has denied any wrongdoing, the case offers a closer look at what Apple considers some of its most valuable assets. It also raises important questions about talent hiring, intellectual property, and the growing competition to build the next generation of AI devices.
What Exactly Is Apple Alleging?
Apple’s 41-page complaint makes several allegations against OpenAI, two former Apple employees, and io Products. Rather than presenting one broad accusation, Apple divides its claims across four key areas that it believes helped OpenAI accelerate its AI hardware efforts.
1. Employee Departures
The lawsuit names Tang Yew Tan, Apple’s former Vice President of Product Design for the iPhone and Apple Watch, and Chang Liu, a former Senior System Electrical Engineer.
Tan spent about 24 years at Apple. He left in early 2024 and, according to his own LinkedIn history, joined a hardware startup operating in stealth. That startup appears to have been io, the company Jony Ive co-founded. In mid-2025, around the same time io was folded into OpenAI, Tan’s title changed to Chief Hardware Officer at OpenAI. Liu spent about eight years at Apple as a senior system electrical engineer before leaving for OpenAI in January 2026.
Apple claims both employees had access to highly confidential information through their roles and continued handling sensitive material before and after leaving the company.
According to the complaint, Tan later became OpenAI’s Chief Hardware Officer, while Liu joined OpenAI’s hardware team. Apple also notes that more than 400 former Apple employees now work at OpenAI, although it does not accuse all of them of wrongdoing.
The complaint also describes a third figure, a departing Apple employee referred to as Peng, who moved to OpenAI. Apple claims Liu walked Peng through how to copy files without alerting Apple’s security team and told her which specific files and data to take.
Apple says it recovered text messages from Peng’s Apple-issued laptop, including one from Liu sent shortly after he left Apple about still having access to another computer.
2. Confidential Material
Apple alleges that confidential information related to unreleased products, hardware engineering, manufacturing processes, supplier relationships, technical specifications, engineering presentations, project code names, and internal development documents was improperly retained or accessed.
The complaint claims Liu exploited a previously unknown authentication bug after leaving Apple to regain access to Apple’s internal network and download dozens of confidential hardware files.
Apple says Liu also failed to return a company-issued laptop when he left, and used it to reach Apple’s internal systems. Apple claims one file Liu pulled ran over a thousand pages of technical documentation covering his own prior work at the company.
3. OpenAI’s Involvement
Apple argues that the alleged misconduct extended beyond individual employees. The complaint claims OpenAI’s hardware leadership encouraged candidates interviewing from Apple to discuss confidential projects, bring hardware components such as batteries and circuit boards to interviews for “show and tell” sessions, and answer questions about unreleased products, suppliers, and manufacturing decisions.
Apple has also named io Products, the hardware startup acquired by OpenAI, alleging it obtained proprietary industrial design techniques through Apple’s supplier network under false pretences. OpenAI has denied these allegations and says it has no interest in using another company’s trade secrets.
4. Legal Claims
Based on these allegations, Apple has accused the defendants of trade secret misappropriation, breach of contract, and related legal violations. The company is seeking monetary damages and court orders that would prevent OpenAI and the other defendants from using or benefiting from Apple’s confidential information as the case moves forward.
What This Lawsuit Could Mean for the AI Industry
While the outcome of the lawsuit will ultimately depend on the evidence presented in court, it has already drawn attention to how AI companies hire talent, handle confidential information, and build new products. The case could lead to stricter hiring practices, stronger due diligence during acquisitions, and greater scrutiny of how companies protect intellectual property as competition in AI continues to grow.
The timing of the lawsuit is also notable. Reports suggest OpenAI is working on its own AI-first smartphone, making its expansion beyond software increasingly clear.
The acquisition of io, the recruitment of experienced industrial designers, hardware engineers, and manufacturing specialists, and its growing investment in physical devices all point in the same direction. OpenAI is no longer focused only on building AI models. It is also investing heavily in the hardware that could bring those models to millions of users.
For now, the allegations remain unproven, and OpenAI has denied any wrongdoing. As the legal process moves forward, the evidence presented by both sides will determine how the case unfolds. Regardless of the final verdict, this lawsuit is likely to become an important reference point for how technology companies approach talent hiring, acquisitions, and intellectual property in the race to build the next generation of AI devices.
