Apple $AAPL filed a civil lawsuit against OpenAI and two of its employees Friday, accusing the AI company of stealing trade secrets to advance its hardware ambitions. The suit was filed in the Northern District of California, according to The Wall Street Journal.
Named in the complaint are Tang Tan, OpenAI's chief hardware officer, and Chang Liu, a technical staff member — both identified as former Apple employees who allegedly obtained the company's confidential information. According to the complaint, Tan forwarded Apple supplier information to his personal email and told prospective hires who were still on Apple's payroll to arrive at their OpenAI interviews carrying "actual parts" — gatherings the suit characterizes as "show and tell" sessions. Before leaving Apple after a 24-year tenure — during which he rose to lead product design — Tan had worked closely with Apple's head of industrial design Jony Ive, whose hardware venture io Products later absorbed Tan and ultimately folded into OpenAI.
Liu's alleged misconduct centered on a former Apple colleague he was actively recruiting: the suit claims Liu borrowed that person's work computer to reach Apple's internal systems and pull "dozens of Apple's confidential hardware-related files," then gave the recruit guidance on transferring sensitive documents in ways designed to slip past Apple's security monitors.
The lawsuit does not name Jony Ive.
The legal action marks a sharp deterioration in the relationship between the two companies. The two sides signed a deal in 2024 to integrate OpenAI's ChatGPT with Apple's Siri, but the partnership has since unraveled. Apple's new Siri AI, announced in June, runs on Google $GOOGL's Gemini technology rather than ChatGPT.
OpenAI had also weighed its own legal action against Apple. OpenAI reportedly considered a breach-of-contract notice against Apple, believing the integration failed to deliver the subscriber growth and visibility it expected. Revenue from the arrangement fell well below projections, and OpenAI's attempts to renegotiate the partnership stalled. OpenAI still hoped to resolve its grievances outside of court, and had not committed to any course of action.
From Apple's side, the partnership frayed in part over concerns about OpenAI's data privacy practices and growing tension over OpenAI's recruitment of Apple hardware talent, according to the Wall Street Journal. OpenAI has been building out a device division and, as Quartz reported on OpenAI's hardware push, has been working with some of Apple's key manufacturing partners while hiring senior Apple alumni to lead the effort.
A separate trade-secret case also hangs over OpenAI, brought by iyO — a startup building a screenless, voice-activated earworn device — which claimed last year that a former engineer pilfered its files and delivered them to Tan during his time as a senior figure at io Products. OpenAI has denied those allegations. The Journal, citing a person with knowledge of the situation, also reported that OpenAI had weighed serving Apple with a breach-of-contract notice this year over claims that Apple failed to honor its 2024 commitment to promote ChatGPT through Siri. Apple had not responded to a request for comment by press time.