Apple sues OpenAI, io Products over hardware trade secrets

Apple has sued OpenAI and io Products in California, saying they may have stolen hardware trade secrets. The complaint claims that former Apple engineers and OpenAI recruiters took confidential design files and used hidden tactics to avoid security checks. Apple is asking the court to make OpenAI return or destroy any disputed materials and possibly redesign their hardware. The case is still in its early stages, and OpenAI has not formally responded yet. This lawsuit appears to put the partnership between Apple and OpenAI at risk, with the outcome still unclear.

Apple is suing OpenAI and its hardware subsidiary, io Products, for alleged trade-secret theft related to hardware development. The lawsuit, filed July 10, 2026, in California, pits the iPhone maker against a key AI partner, claiming OpenAI misused Apple's intellectual property to fast-track a rival device line. The suit names OpenAI entities, io Products, and two former Apple engineers, Tang Yew Tan and Chang Liu.

Key Allegations in Apple's Complaint

The lawsuit centers on Apple's claim that OpenAI and its subsidiary, io Products, systematically poached employees to acquire confidential hardware designs and manufacturing data. Apple alleges this was a deliberate campaign to accelerate the development of a competing consumer AI device using its protected intellectual property.

Apple's complaint outlines four violations of the federal Defend Trade Secrets Act and two breach-of-contract claims. The company alleges a coordinated effort by OpenAI to misappropriate confidential information, citing specific actions:

Former engineer Chang Liu allegedly exploited a laptop authentication bug to copy sensitive circuit-board designs.
OpenAI recruiters reportedly encouraged candidates to bring proprietary Apple components and internal CAD files to job interviews.
OpenAI's chief hardware officer, Tang Yew Tan, allegedly used confidential Apple codenames while interviewing applicants.
The hiring of a significant number of former Apple employees, which the complaint describes as a systematic "pipeline" for acquiring talent and secrets.

Apple is demanding OpenAI redesign its upcoming products to exclude Apple's technology and unspecified monetary damages. Apple seeks court-ordered injunctions to force the return or destruction of its intellectual property and has requested a jury trial.

Legal Proceedings and Timeline

As of mid-July 2026, the case is in its earliest procedural stage, with no formal response yet filed by OpenAI and no hearings scheduled. Legal experts anticipate Apple will soon file for a preliminary injunction. Apple is seeking a jury trial and injunctive relief to protect its intellectual property.

Recruiting Tactics Under the Microscope

The lawsuit focuses heavily on what Apple describes as "knowing and deliberate" recruiting tactics. The complaint alleges that internal OpenAI messages show former engineer Chang Liu coaching a colleague on bypassing Apple's security protocols. It also cites a checklist, allegedly from Tang Yew Tan, that guided recruits on evading laptop forensic analysis during their departure. While these specific claims could strengthen Apple's case for an injunction, legal experts caution that proving the information qualifies as a protected trade secret is a high bar.

Potential Impact on OpenAI Hardware Rollout

The lawsuit could significantly disrupt OpenAI's hardware ambitions. Following OpenAI's acquisition of Jony Ive's design firm, io Products, for approximately $6.4-$6.5 billion in May 2025, the company has been developing hardware products, though no specific launch timeline has been confirmed. An injunction or a court-mandated redesign, as requested by Apple, could cause major delays to this development, though OpenAI has not publicly announced specific targets.

What Happens Next

The next procedural step involves both parties exchanging initial legal disclosures. Apple will be required to define its alleged trade secrets with "reasonable particularity," after which OpenAI will have the opportunity to file motions to dismiss the case. A preliminary injunction hearing could offer an early look at the technical evidence and arguments. This legal battle escalates the tension between the two tech giants, casting doubt on the future of their partnership, including the integration of ChatGPT into Apple's operating systems.