Apple filed a blockbuster federal lawsuit against OpenAI on 10 July in the U.S. District Court for the Northern District of California, alleging systematic trade secret theft that the company says was directed 'at every level' of OpenAI's organisation.
The complaint centres on OpenAI's aggressive recruitment of Apple engineers as it entered the hardware industry following its $6.4 billion acquisition of Jony Ive's io Products startup. Apple alleges that more than 400 of its former employees now work at OpenAI — and that the hiring process was designed to extract confidential information.
Tang Tan, OpenAI's Chief Hardware Officer who spent 24 years at Apple as Vice President of product design for iPhone and Apple Watch, is named as a key figure. Apple alleges Tan directed job candidates still employed at Apple to bring 'actual parts' from Apple projects to their interviews for 'show and tell' sessions where his team could access confidential technical information.
A second named individual, Chang Liu, who spent eight years at Apple as a senior systems electrical engineer, allegedly failed to return an Apple-issued laptop after joining OpenAI in 2026 and used the computer to download confidential Apple technical documents before his departure.
Apple further alleges that OpenAI 'actively coached' departing Apple employees on how to handle their exits, including advice on avoiding prompt removal so they could continue accessing Apple's confidential systems and information after accepting OpenAI offers.
The lawsuit represents a dramatic reversal for two companies that entered a high-profile partnership in 2024 when ChatGPT was integrated into the iPhone's operating system. Relations deteriorated after OpenAI announced plans to build its own consumer hardware.
Apple is seeking an injunction barring OpenAI from using or disclosing any trade secrets, requiring the return of all confidential materials, and preservation of evidence. The filing states: 'This is the tip of the iceberg. Apple lacks visibility into what is happening behind closed doors at OpenAI.' OpenAI responded: 'We have no interest in other companies' trade secrets. We remain focused on building innovative technology.'
For context engineers, the lawsuit underscores the intensifying competition for AI hardware talent and the legal risks companies face when recruiting aggressively from competitors — particularly as frontier AI companies expand from software into physical products.
