Apple sues OpenAI over alleged trade-secret theft for hardware push

Apple sued OpenAI on Friday in federal court in Northern California, alleging the artificial intelligence company stole trade secrets to advance its planned consumer hardware business. The case targets OpenAI, IO Products and individual defendants, and seeks damages, injunctions and an order barring the use of Apple trade secrets, according to the legal filing cited by CNBC.

The dispute marks a sharp turn in a relationship that began publicly with a 2024 partnership placing ChatGPT inside the iPhone operating system. CNBC reported that OpenAI Chief Executive Sam Altman attended the announcement at Apple’s headquarters.

Apple’s complaint says the alleged conduct reached across OpenAI’s hardware effort. In the filing, Apple said that “at every level,” from technical employees to OpenAI’s chief hardware officer and business partners, the company had been taking Apple confidential information and trade secrets.

Allegations center on former Apple employees

Many of Apple’s claims involve people who either left Apple for OpenAI or interviewed with the AI company, according to CNBC. Apple named Tang Tan, OpenAI’s chief hardware officer and a former Apple vice president, as a defendant.

Apple alleged in the filing that Tan told Apple employees who were interviewing with OpenAI to provide confidential material during the hiring process. The company claimed Tan directed candidates who still worked at Apple to bring “actual parts” from Apple to interviews for “show and tell” sessions, where OpenAI personnel could obtain more confidential information.

The iPhone maker also alleged that OpenAI coached departing Apple employees on how to bypass Apple’s security procedures as they left the company. Apple named Chang Liu, a former Apple employee who joined OpenAI, as a defendant and alleged that Liu stole an Apple laptop, according to the filing.

An Apple representative told CNBC that “significant evidence” had recently emerged suggesting people employed by OpenAI improperly took secret and confidential Apple information tied to unreleased technologies, processes and products.

Hardware ambitions raise stakes

OpenAI has not disclosed the timing or details of its hardware products. Altman said in November that the company had completed its first prototypes, CNBC reported.

The company’s move into devices accelerated last year when OpenAI bought IO Products, the startup founded by former Apple designer Jony Ive, for $6.4 billion. IO Products is also named in Apple’s lawsuit.

Apple further alleged that OpenAI has asked hardware companies to use a metal-finishing process invented by Apple, while leading a partner to believe OpenAI had Apple’s permission to do so. The filing does not describe a released OpenAI device using the technique.

The litigation lands as Apple shifts parts of its own AI strategy. CNBC reported that Apple’s updated Siri assistant, due this fall, is based on Google’s Gemini AI models rather than ChatGPT.

Apple did not comment to CNBC on whether the lawsuit would affect its existing OpenAI partnership, under which ChatGPT is integrated into Apple Intelligence. The court case now places a legal constraint around OpenAI’s consumer hardware plans at a time when major technology companies are competing to turn AI software into products used directly by consumers.

This story draws on original reporting from CNBC Markets.