Apple Sues OpenAI Over Stolen Trade Secrets from Former Employees
Key Points
- SAN FRANCISCO — Apple sued OpenAI and two former employees on Friday, accusing the ChatGPT maker of stealing confidential hardware trade secrets through unauthorized access to internal systems and the misappropriation of proprietary design information.
- The complaint, filed in the U.S. District Court for the Northern District of California, names former Apple senior system electrical engineer Chang Liu and former iPhone and Apple Watch design executive Tang Yew Tan, along with OpenAI Foundation, OpenAI Group PBC, and io Products. Apple alleges that Liu, who left the company in January after eight years of employment, failed to return a company laptop and later exploited an authentication bug to access Apple's confidential shared network folders.
- "While employed by OpenAI, Mr. Liu also exploited a rare, previously unknown authentication bug to access Apple's shared network folders," Apple's attorneys stated in the complaint. "Upon discovering that he had this unauthorized access to Apple's systems, Mr. Liu did not report it, return his stolen Apple-issued work laptop, or delete the program that allowed the access."
According to the filing, Liu downloaded dozens of confidential hardware files containing information about unreleased products, engineering presentations, technical specifications, and proprietary project data. Apple also alleges that Tan, who spent 24 years at the company before becoming OpenAI's chief hardware officer, leveraged confidential information from his tenure at Apple to benefit OpenAI's hardware initiatives.
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The lawsuit reveals that OpenAI's recruiting process requested "CAD/design artifacts," prototypes, supplier information, and details about employees' work on Apple hardware. Apple claims candidates were instructed to bring "actual parts" for "show and tell" during interviews. According to the filing, OpenAI's hardware division has hired more than 400 former Apple employees.
The legal action follows OpenAI's $6.4 billion acquisition of io Products, the hardware startup founded by former Apple designer Jony Ive. Ive is not named in the complaint. Apple states it contacted OpenAI in February regarding concerns about confidential information entering the company but did not receive a response.
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Apple and OpenAI did not immediately respond to requests for comment regarding the lawsuit. The dispute marks a significant reversal in the relationship between the two technology companies. In 2024, Apple had selected OpenAI to bring ChatGPT to Siri as part of its Apple Intelligence initiative. However, earlier this year, Apple switched to Google's Gemini to power its next generation of AI models after delays stalled the ChatGPT rollout.
The lawsuit is not the first trade secret dispute involving OpenAI. In September, xAI, the AI company backed by Elon Musk, sued OpenAI alleging the ChatGPT maker recruited former employees to obtain confidential source code, training methods, and data center strategies. OpenAI denied those allegations, and a federal judge dismissed the lawsuit in June, finding that xAI failed to demonstrate OpenAI encouraged a former employee to disclose confidential information.
Why this matters: The lawsuit sets a precedent for how technology companies will protect intellectual property as AI startups aggressively recruit talent from established players, potentially influencing hiring practices and confidentiality agreements across the industry.
Market Outlook
The case may prompt tech companies to impose stricter non-compete agreements and implement stronger controls on access to confidential systems. OpenAI's rapid hardware expansion through former Apple talent acquisition could face increased legal scrutiny, and other major tech firms may pursue similar trade secret claims against AI competitors recruiting their employees.
Sources: AP, Reuters, ESPN, Bloomberg, BBC and other international news outlets.
Disclaimer: This article is for informational purposes only. Content is based on publicly available news sources.
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