Apple sues OpenAI, two former employees for trade secrets theft

Stephen Nellis, Jaspreet Singh and Deepa Seetharaman

Fri, July 10, 2026 at 1:28 PM PDT 5 min read

By Stephen Nellis, Jaspreet Singh and Deepa Seetharaman

July 10 (Reuters) - Apple on Friday sued OpenAI and two former employees, alleging misappropriation of its trade secrets to benefit the ChatGPT-owner's foray into consumer hardware, a dramatic escalation of already simmering tension between the two companies.

The complaint accuses OpenAI of orchestrating a broad effort to systematically acquire and exploit Apple's confidential information through former employees, ‌recruiting practices and supplier relationships to accelerate its push into the consumer hardware business.

"We have no interest in other companies' trade secrets," OpenAI said in a statement. "We remain focused on building innovative technology ‌that empowers people everywhere."

The lawsuit sets up a battle over who will control future AI devices that may not use traditional apps or operating systems — devices which, if successful, would direct consumer attention away from Apple's best-selling iPhone. Analysts believe OpenAI is working on a phone ​or other device of its own.

Tensions between the two tech companies have strained their relationship, as the race to develop AI products has intensified competition for talent and proprietary technology.

"Apple sees OpenAI moving from partner to potential rival, while OpenAI is trying to reduce its dependence on the iPhone and build a direct relationship with consumers," said PP Foresight analyst Paolo Pescatore. "Even if the allegations are not proven, the lawsuit could delay OpenAI's hardware ambitions and further weaken what is already becoming an increasingly fragile partnership."

Apple's lawsuit, which was filed in the U.S. District Court for the Northern District of California, comes just after OpenAI successfully fended off a legal challenge from Elon Musk's xAI.

The two former Apple employees named in ‌the suit are Chang Liu, a former senior system electrical engineer, and former ⁠vice president of product design for iPhone and Apple Watch, Tang Yew Tan. Neither immediately responded to a request for comment.

Apple alleged that Liu failed to return a company-issued work laptop and later used an authentication bug to access Apple's internal network, downloading "dozens of Apple's confidential hardware-related files."

The iPhone maker also claimed that OpenAI's hardware chief Tan had been "methodically ⁠using Apple's confidential information to benefit OpenAI" before his departure by emailing himself information about Apple suppliers and internal industry summaries. Tan worked on the iPhone for most of his 24-year tenure at Apple, according to his LinkedIn page.