Apple vs. OpenAI: The Partnership That Became a War

The most consequential partnership in consumer technology has just become its most explosive lawsuit. Apple sued OpenAI in federal court in Northern California on Friday, alleging trade secret theft, saying that the artificial intelligence lab took the iPhone maker's intellectual property in order to develop its own consumer hardware. The move is a stunning reversal for two companies that entered a high-profile partnership as recently as 2024, when ChatGPT was integrated into Apple Intelligence. 

At the centre of the complaint are two named individuals. Tang Tan, who spent 24 years at Apple most recently as VP of product design for the iPhone and Apple Watch before joining OpenAI as Chief Hardware Officer, is accused of using Apple's confidential project code names during OpenAI's recruiting process, asking job candidates to bring in Apple hardware components to their interviews, and coaching departing Apple employees on how to evade the company's security procedures. Chang Liu, who spent eight years at Apple as a senior systems electrical engineer, failed to return an Apple-issued laptop after leaving for OpenAI and used it to download confidential Apple technical documents including information about unannounced technologies, features, and products. 

The lawsuit claims that while Liu was developing hardware for OpenAI, he accessed and downloaded dozens of confidential files from Apple's network, many labelled as confidential, after discovering a bug that allowed him to access Apple's cloud file storage after leaving the company. The filing describes the conduct as systematic rather than opportunistic. As part of its investigation, Apple found a pattern by employees who depart for OpenAI of taking steps to evade the security processes intended to protect Apple's confidential information — including a "Need to Know" Apple offboarding document allegedly distributed by Tan to new OpenAI hires before they gave notice to Apple. 

The backdrop to the lawsuit is OpenAI's rapidly accelerating hardware ambition. OpenAI's hardware efforts are being led by Jony Ive, Apple's former chief design officer. OpenAI acquired Ive's startup io Products as part of a $6.5 billion deal, which included more than 50 engineers, developers, and other employees. The complaint alleges over 400 former Apple employees now work at OpenAI — a talent drain that has been building quietly for two years and is now at the centre of a federal courtroom.

Apple is asking the court to bar OpenAI from using or disclosing its trade secrets, require the company to return any confidential Apple materials, and preserve evidence related to the case. The filing states bluntly: "This is the tip of the iceberg. Apple lacks visibility into what's been happening behind closed doors at OpenAI, where such misconduct is normalized and exemplified by leadership. As a natural result, OpenAI's nascent hardware business now rests on the shakiest of foundations, rotten to its core by its illegal reliance on misappropriated trade secrets." OpenAI responded that it has no interest in other companies' trade secrets and remains focused on building innovative technology — a statement that will now be tested in federal court.