Apple sues OpenAI alleging systematic hardware trade secret theft

Apple filed a federal lawsuit against OpenAI on July 10, 2026 in the Northern District of California, alleging systematic theft of hardware trade secrets tied to unreleased products and breach of confidentiality agreements. Apple claims the scheme was orchestrated by OpenAI's senior leadership, including Chief Hardware Officer Tang Tan — a former 24-year Apple employee.

Key takeaways

Tang Tan, OpenAI's Chief Hardware Officer and former Apple VP of product design for iPhone and Apple Watch, is named as directing the alleged scheme
Apple accuses Tan of using confidential Apple project codenames during recruiting, asking candidates to bring hardware components to interviews, and coaching departing Apple employees on how to evade security procedures
Chang Liu, a former Apple engineer, allegedly kept a company-issued laptop after leaving for OpenAI and used it to download confidential technical documents
Apple sent a letter to OpenAI in February 2026 raising concerns — and received no response
OpenAI is developing its first hardware product, a potential iPhone rival, giving the dispute direct competitive context

OpenAI builds hardware, Apple responds

The lawsuit arrives as OpenAI aggressively builds hardware competence. In 2025, the company acquired Jony Ive's design startup io for $6.5 billion specifically to strengthen its product design capabilities. Industry analyst Ming-Chi Kuo suggested in April 2026 that OpenAI's first hardware product could be a smartphone relying on AI agents instead of traditional apps — a direct threat to the iPhone.

Apple alleges that stolen materials included technical specifications, engineering presentations, and proprietary project data about unreleased products. The filing also claims OpenAI used a confidential Apple metal finishing technique after allegedly misleading a manufacturing partner into believing it had Apple's permission.

A pattern of theft, according to Apple

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.

Apple, from the filing

OpenAI responded publicly on X: "We have no interest in other companies' trade secrets. We remain focused on building innovative technology that empowers people everywhere."

The suit is the first high-profile legal conflict between the two largest companies in AI software and consumer hardware. It is not the first talent-related trade secret dispute in tech — similar cases have previously involved Google and Uber, among others.

Legal and market implications

Apple is asking the court to bar OpenAI from using its trade secrets, require return of confidential materials, and preserve evidence. The legal discovery process could reveal significant details about the state of OpenAI's hardware project — which may itself be a strategic objective for Apple's legal team.

The combination of legal, personnel, and product dimensions is unusual. Tang Tan built the iPhone for over two decades. If OpenAI systematically used his knowledge of Apple's unreleased products, the case lands squarely in federal trade secret law — the Defend Trade Secrets Act (DTSA) provides for both civil remedies and criminal referrals.

Why this matters

This case marks a boundary the AI industry has not publicly crossed before. OpenAI is no longer just a model company — it is an emerging hardware competitor to Apple, Google, and Samsung. When the AI talent war plays out between companies competing in the same product category, confidentiality procedures become real legal barriers, not just HR formalities.

The outcome could set a precedent for how far new hardware entrants can leverage knowledge built over decades inside incumbent companies. For OpenAI, currently transforming from a model provider into a product company, this is the most serious legal test of that transition.

What's next?

The court must rule on Apple's request for a temporary restraining order barring OpenAI from using disputed information — if granted, it could block or delay OpenAI's hardware project
Discovery proceedings will generate public information about the state of OpenAI's hardware project — potentially revealing details about the smartphone or other device
OpenAI may file a countersuit or seek a settlement before sensitive design data is disclosed publicly