Key Takeaways:
Apple's lawsuit against OpenAI echoes the Waymo-Uber trade secret battle, alleging a coordinated effort to steal hardware IP for the AI startup's device ambitions.
Apple filed a federal lawsuit Friday accusing OpenAI of orchestrating the theft of proprietary hardware designs through more than 400 former Apple employees now working at the AI company, according to a complaint filed in California federal court.
"This case is about Apple's former employees stealing Apple's trade secrets for the benefit of OpenAI," Apple said in the filing. "We will always defend our teams' hard work and innovations, and we are taking all appropriate steps to do so," an Apple spokesperson said.
The lawsuit names two former Apple employees — Tang Tan, OpenAI's chief hardware officer, and Chang Liu, a former electrical engineer — along with IO Products, the hardware startup co-founded by Jony Ive that OpenAI acquired for $6.5 billion. Apple alleges Liu downloaded "dozens of Apple's confidential hardware-related files, including voluminous, detailed information about unreleased products, engineering presentations, technical specifications, and proprietary project data" after his departure in January. Tan is accused of emailing information about Apple suppliers to himself before leaving and directing Apple employees interviewing at OpenAI to bring "actual parts" for show-and-tell sessions.
The case threatens to upend OpenAI's hardware ambitions as it prepares to ship its first device next year. OpenAI's partnership with Apple, which provides ChatGPT integration for Siri and Apple Intelligence, faces an uncertain future — Apple's new Siri AI, announced in June, will use Google's Gemini instead.
A Pattern Borrowed From Silicon Valley's Playbook
The lawsuit draws a direct line to Waymo's 2017 trade secret case against Uber, which settled after four days of trial for a $245 million stake in the ride-hailing company. In that case, former Google engineer Anthony Levandowski downloaded proprietary LiDAR files before leaving to start his own venture, which Uber quickly acquired. Levandowski later pleaded guilty to federal criminal charges before being pardoned by President Trump.
Apple's complaint alleges OpenAI's conduct goes beyond individual bad actors. The company claims OpenAI designed its interview process to extract confidential information, requiring technical presentations, CAD artifacts, and physical parts from Apple. OpenAI also coached departing employees on how to avoid scrutiny — hiding their next employer and refusing to sign exit paperwork — and never responded when Apple raised concerns in February, according to the filing.
OpenAI's Hardware Ambitions at Risk
OpenAI's first hardware product is expected next year, but the lawsuit casts doubt on whether it can ship without relying on Apple's intellectual property. "OpenAI's nascent hardware business now rests on the shakiest of foundations, rotten to its core by its illegal reliance on misappropriated trade secrets," Apple said in the complaint.
OpenAI denied the allegations. "We have no interest in other companies' trade secrets," Drew Pusateri, an OpenAI spokesperson, said. "We remain focused on building innovative technology that empowers people everywhere."
The legal battle arrives as both companies released competing AI models this week — OpenAI's GPT-5.6 and SpaceXAI's Grok 4.5 — intensifying the broader AI arms race. The spat spilled into public view when Elon Musk accused OpenAI Chief Executive Officer Sam Altman of fraud on X, drawing a retort from Altman about Musk's space data center concept.
For investors, the case introduces a new layer of risk. Apple shares could face pressure if the lawsuit disrupts its supply chain relationships, while OpenAI's valuation — last reported at $300 billion — may be affected if it is forced to redesign its hardware or forfeit partnership revenue from Apple. The case also raises questions about which of the more than 400 former Apple employees at OpenAI may have been involved in the alleged scheme.
This article is for informational purposes only and does not constitute investment advice.
