Apple and OpenAI partnered in 2024 to bring ChatGPT to the iPhone. Now Apple is suing OpenAI in federal court, accusing it of orchestrating the theft of trade secrets through two former employees. The lawsuit, filed on July 10 in a California federal court, names OpenAI, its hardware subsidiary io Products, and two individuals: Tang Tan and Chang Liu.
The allegations: a “coordinated pattern of misconduct”
Apple’s complaint describes what it calls an institutional-level effort to extract confidential information. Tang Tan, who designed components for the iPhone, Apple Watch, and iPod, left Apple to become OpenAI’s chief hardware officer. Chang Liu, an electrical engineer, joined OpenAI earlier in 2026.
According to the filing, Liu downloaded hardware-related files on an Apple-issued device after departing. Tan allegedly instructed job candidates still employed at Apple to bring “actual parts” from Apple to their OpenAI interviews. Apple claims both accessed confidential company files while already working for OpenAI.
The io Products connection
The backdrop to this case is OpenAI’s acquisition of io Products in a deal valued at nearly $6.5 billion. The startup, founded by former Apple design chief Jony Ive, is building an AI-powered hardware device. Both Tan and Liu were placed within this division — which Apple argues makes the alleged theft directly relevant to a competing product.
Partners in public, adversaries in court
What makes this lawsuit unusual is that the business relationship between Apple and OpenAI remains intact. ChatGPT is still embedded in Siri and iOS. But Apple says it raised concerns with OpenAI as early as February 2026, months before filing suit.
Apple stated it will “always defend our teams’ hard work and innovations.” OpenAI responded that it has “no interest in other companies’ trade secrets” and remains “focused on building innovative technology that empowers people everywhere.”
What this means for the AI hardware race
The case highlights a growing tension in the tech industry. As companies race to build AI-native hardware, they’re recruiting from a small pool of engineers with deep product knowledge. Where personal expertise ends and proprietary information begins is the legal question at the heart of this lawsuit.
The outcome could set a precedent for how trade secret protections apply in an industry where talent mobility and strategic partnerships coexist — and sometimes collide.