Apple Sues OpenAI, Accusing ChatGPT Maker of Systematically Stealing iPhone Hardware Secrets

Apple filed a federal lawsuit against OpenAI on July 10, 2026, accusing the ChatGPT maker of orchestrating a coordinated campaign to steal confidential iPhone and Apple Watch hardware designs through former Apple employees, including the executive now running OpenAI's hardware division. The complaint, filed in the U.S. District Court for the Northern District of California, also names OpenAI's hardware-design subsidiary io Products and two individuals — Tang Tan, OpenAI's chief hardware officer, and Chang Liu, a former Apple engineer — as defendants. Apple is seeking monetary damages and a court order blocking OpenAI from using the disputed information, escalating what had been a quiet talent rivalry into open legal warfare between two of the industry's most consequential companies.

The lawsuit alleges the misconduct was directed from the top of OpenAI's hardware effort rather than carried out by rogue employees. According to the complaint, Tan — a 24-year Apple veteran who most recently served as vice president of product design for iPhone and Apple Watch — used Apple's internal confidential project code names while recruiting Apple staff to OpenAI, asked job candidates to bring "actual parts" and prototypes to interviews for "show and tell" sessions, and began emailing himself information about Apple's suppliers before he departed. Apple further alleges Tan coached departing employees on how to evade the company's security procedures and that OpenAI representatives contacted Apple's manufacturing partners seeking proprietary techniques, including a metal-finishing process.

The complaint's most granular allegations center on Liu, an electrical engineer who spent eight years at Apple before joining OpenAI in 2026. Apple claims Liu kept his Apple-issued laptop after leaving the company, exploited a security flaw to continue accessing Apple's cloud file storage post-departure, and downloaded dozens of confidential technical documents, some explicitly marked confidential. Apple also alleges Liu instructed another Apple employee on how to copy files off company systems without detection. "This case is about Apple's former employees stealing Apple's trade secrets for the benefit of OpenAI," Apple's complaint states, according to reporting reviewed by TechCrunch and PetaPixel. Apple says it sent OpenAI a cease-and-desist letter in February 2026 that went unanswered before it moved to file suit.

The scale of employee movement between the two companies is central to Apple's theory of a coordinated scheme: Apple says more than 400 of its former employees are now employed at OpenAI. Bloomberg's Mark Gurman, commenting on the figure, called it "a gigantic number." OpenAI has pushed back forcefully on the theft allegations while declining to directly address the specific claims about Tan and Liu. A company spokesperson, identified in some reports as director Drew Pusateri, said, "We have no interest in other companies' trade secrets. We remain focused on building innovative technology that empowers people everywhere." OpenAI CEO Sam Altman struck a notably measured tone on X, writing, "i am not afraid of apple, but i have tremendous respect for them. s-tier company" — a contrast to the company's more combative statement.

The dispute lands against a backdrop of a rapidly deteriorating relationship between the two companies. Apple and OpenAI struck a high-profile partnership in 2024 that embedded ChatGPT directly into iOS as part of Apple Intelligence, but Apple announced in January 2026 that it was pivoting to Google's models for those same features, effectively ending the ChatGPT integration. Around the same period, OpenAI has been building out its own hardware ambitions: it acquired io Products, the design studio founded by former Apple chief design officer Jony Ive, for roughly $6.4–6.5 billion in a deal completed in 2025. Altman has spoken publicly of a "new class of AI gadgets" intended to replace smartphones as the primary way people interact with AI — a device category that would compete directly with the iPhone, giving Apple's trade-secret claims added strategic weight beyond the underlying legal dispute.

Despite the severity of the allegations, markets shrugged off the news: Apple shares closed the following Friday at $315.32, down just 0.28% on the day, with the stock still up more than 16% year to date. The lawsuit did, however, spill into a separate public spat, with Tesla and SpaceX CEO Elon Musk mocking Altman on X over the allegations and reviving his "Scam Altman" nickname; Altman responded by needling Musk over SpaceX's orbital data center ambitions. Analysts and outlets including Fortune noted the timing is notable given OpenAI is simultaneously preparing for a widely anticipated initial public offering, and any prolonged discovery process could force disclosure of OpenAI's unreleased hardware plans — a risk to the company's product secrecy regardless of the suit's ultimate outcome. Legal experts note that trade-secret cases of this scope typically take months to reach even preliminary rulings, meaning the practical fight — over what OpenAI can say, build, and hire in the meantime — is likely to play out well before any trial date.

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