Apple has sued OpenAI and two former employees, accusing the ChatGPT developer of misappropriating trade secrets as the artificial intelligence company moves deeper into consumer hardware, escalating tensions between the two technology giants.
The lawsuit, filed on Friday in the US District Court for the Northern District of California, alleges that OpenAI carried out a broad effort to obtain and use Apple’s confidential information through former employees, recruitment practices and relationships with suppliers.
Apple claims the alleged actions were aimed at accelerating OpenAI’s expansion into consumer hardware, a market that could challenge traditional devices such as smartphones and reshape competition between major technology companies.
OpenAI rejected the allegations, saying in a statement that it had no interest in other companies’ trade secrets and remained focused on developing technology that benefits users.
The legal dispute comes as both companies compete over the future of artificial intelligence products and devices. Analysts have said OpenAI is exploring hardware options, including a possible phone or other consumer device, that could reduce dependence on traditional smartphone platforms and create a direct connection with users.
Paolo Pescatore, an analyst at PP Foresight, said Apple viewed OpenAI as shifting from a technology partner into a possible competitor, while OpenAI was seeking to reduce its reliance on Apple’s iPhone ecosystem.
Apple and OpenAI previously developed a partnership that brought ChatGPT integration to Apple devices. In 2024, Apple announced that its Apple Intelligence technology would incorporate ChatGPT features across its applications, including Siri, allowing users to access ChatGPT responses through Apple’s services.
However, competition for artificial intelligence talent and proprietary technology has increasingly strained the relationship between the two companies.
The lawsuit names former Apple senior system electrical engineer Chang Liu and former Apple vice president of product design for iPhone and Apple Watch, Tang Yew Tan. Neither immediately responded to requests for comment.
Apple alleged that Liu failed to return a company-issued laptop after leaving the company and later used an authentication flaw to access Apple’s internal network, downloading what the company described as dozens of confidential hardware-related files.
The company also accused Tan, who worked on the iPhone for much of his 24-year career at Apple, of using confidential Apple information to benefit OpenAI before his departure. Apple said Tan emailed himself information related to suppliers and internal industry summaries.
Apple further alleged that Tan encouraged Apple employees applying for positions at OpenAI to bring hardware components from Apple to job interviews for demonstration sessions. The company cited an incident in which a candidate allegedly expressed surprise that employees could take such items from Apple offices.
The lawsuit also names OpenAI Foundation, OpenAI Group PBC, the company’s commercial arm, and io Products, the hardware startup acquired by OpenAI.
In its complaint, Apple said it contacted OpenAI in February over concerns that confidential information had reached the company and requested discussions, but received no response.
Apple said more than 400 former employees now working at OpenAI previously had access to Apple confidential information, while arguing that employing former staff members did not give OpenAI the right to use Apple’s trade secrets for its hardware development.
Legal experts said the case could become significant because previous trade secret disputes in the technology industry have often focused on software rather than hardware. Stanford Law School professor Mark Lemley said hiring employees from competitors was not necessarily illegal under California law, but the alleged transfer and use of confidential documents could create legal problems if proven.
Rutgers Law School professor Camilla Hrdy said the case could become complex as it develops, noting that OpenAI would have the resources to defend itself in a major legal dispute.
The lawsuit follows OpenAI’s acquisition of io Products, a hardware startup founded by former Apple designer Jony Ive, in a $6.5 billion deal last year. Ive was not named as a defendant in Apple’s lawsuit.
The legal action marks a new stage in the growing competition between Apple and OpenAI as both companies seek influence over the next generation of consumer technology.
