Apple filed a federal lawsuit on July 10 against OpenAI, its Chief Hardware Officer Tang Tan, and a second former employee named Chang Liu. The lawsuit accuses them of running a coordinated operation to steal Apple's hardware secrets and funnel them into OpenAI's own device development program.
The person at the center of this is Tang Tan. He spent 24 years at Apple, rising to Vice President of product design for the iPhone and Apple Watch. He then co-founded a hardware startup called io Products alongside Apple's famous former designer Jony Ive. OpenAI bought that startup in May 2025 for around $6.5 billion, making Tan OpenAI's Chief Hardware Officer.
According to Apple's complaint, once inside OpenAI, Tan allegedly ran what amounted to a structured intelligence-gathering operation through the hiring process. He reportedly used Apple's own internal project code names to prompt candidates into revealing information, and directed Apple employees who were interviewing at OpenAI to bring physical hardware parts, including batteries, logic boards, and other components, to their interviews for "show and tell" sessions. Apple says at least one candidate was surprised by the request.
Tan also allegedly obtained an internal Apple document that explains exactly how the company processes employee departures and what security checks it conducts. He and OpenAI recruiters then allegedly used that document to coach departing employees, telling them not to tell Apple where they were going, to stay on Apple's payroll as long as possible, and to avoid signing exit documents.
The second defendant, Chang Liu, left Apple in January 2026 and simply never returned his company-issued laptop. Apple says he then used that laptop, while already working at OpenAI, to download dozens of confidential files covering unreleased products and engineering specifications. Apple discovered the breach in part because Liu texted a former colleague that he had found he could still access Apple's internal file-sharing system.
Apple wrote to OpenAI about these concerns in February. OpenAI did not respond. Apple then kept investigating and filed the lawsuit.
The filing also accuses OpenAI of approaching Apple's manufacturing suppliers with confidential Apple information. One supplier allegedly carried out a specific metal-finishing process for OpenAI after being told, falsely, that Apple had approved the arrangement. Another battery supplier was reportedly approached with targeted questions designed to extract knowledge about Apple's components.
This case lands at a difficult moment for OpenAI. The company has been building a new consumer device with Jony Ive, described as a screenless, voice-operated gadget aimed at being a calm alternative to the smartphone. OpenAI has already filed paperwork with the US Securities and Exchange Commission for what could be one of the largest stock market debuts in history, valued at roughly $852 billion in its last funding round. A legal finding that its hardware program was built on stolen Apple secrets would be a serious problem for both its device timeline and its public market ambitions.
The closest precedent here is the 2017 case when Waymo sued Uber after a departing engineer allegedly took thousands of confidential files. That case settled midway through trial in 2018, with Uber paying around $245 million in equity and agreeing to stop using Waymo's information.
Apple is asking the court to bar OpenAI from using any of the stolen information, require the return of all confidential materials, and award damages in an amount to be decided at trial. The company was direct in the filing: "This is the tip of the iceberg."
For business operators watching from the outside, the practical message here is about what happens when a company recruits heavily from one competitor to build a product that competes directly with that same competitor. Apple has more than 400 former employees now at OpenAI, according to the lawsuit. The lawsuit is, in part, a signal that Apple intends to scrutinize that pipeline going forward.