Apple filed a federal lawsuit on July 10 accusing OpenAI of stealing its most sensitive hardware secrets through a coordinated scheme that went all the way to the top of OpenAI's hardware leadership. The 41-page complaint is public, detailed, and hard to dismiss.
The central figures are two former Apple employees. Tang Yew Tan spent 24 years at Apple overseeing product design for the iPhone and Apple Watch before quietly joining a hardware startup in early 2024. That startup turned out to be io Products, co-founded by Jony Ive, Apple's former design chief. When OpenAI acquired io Products for $6.4 billion in 2025, Tan became OpenAI's Chief Hardware Officer, and is now named as a defendant.
Apple alleges Tan used his knowledge of Apple's internal codenames and project details to interrogate job candidates who were still Apple employees. He allegedly directed them to bring actual physical Apple hardware components to their interviews. That is not a grey area. That is asking someone to walk out of a secure facility with company property.
The second key figure is Chang Liu, a senior electrical engineer who left Apple for OpenAI in January 2026. Apple claims Liu failed to return his work laptop, then discovered a security flaw that gave him continued access to Apple's internal file storage while already employed by OpenAI. He used it to download dozens of confidential files, including specs for products that have not yet been released. Apple says he sent a message to a former colleague saying he had found the access and found it funny.
Apple also alleges OpenAI coached departing employees on how to get around Apple's offboarding security checks, and approached Apple's manufacturing partners with confidential techniques while misleading them into thinking Apple had given permission.
All of this is happening as OpenAI is trying to go public. The company filed its IPO paperwork with US regulators on June 8, working with Goldman Sachs and Morgan Stanley, and was targeting a listing as early as late 2026 at a valuation close to $1 trillion. OpenAI is already not profitable, projecting losses of around $14 billion this year. Rival Anthropic just posted its first operating profit. The story OpenAI needed to tell investors was one of momentum and operational discipline.
A lawsuit from one of the world's largest companies, alleging that the entire hardware division rests on stolen intellectual property, is not that story. Any company going through the IPO process must disclose material legal risks. This one is as material as it gets: Apple is asking the court not just for financial damages, but for an injunction that could bar OpenAI from using the alleged trade secrets entirely. If even a partial injunction is granted before the IPO, OpenAI's hardware roadmap gets thrown into legal limbo.
Apple is also a company that fights these battles systematically. It sued Samsung over hardware design in 2011 and spent years in court. It sued Masimo over health-monitoring technology. It has sued over software interfaces since the late 1980s. When Apple files a lawsuit, it is rarely a bluff.
There is one other angle worth watching. The relationship between the two companies has deteriorated on multiple fronts. Apple quietly dropped OpenAI's ChatGPT from its rebuilt Siri, shifting to Google Gemini and reportedly paying around $1 billion a year for the arrangement. OpenAI had apparently been preparing its own legal action against Apple for allegedly failing to promote ChatGPT adequately after their 2024 partnership. Apple got there first.
For anyone in business who uses OpenAI tools, this does not change anything today. ChatGPT, enterprise APIs, and the rest of OpenAI's software business are not touched by this dispute. But for anyone watching where AI is heading, this case signals something important: the next phase of competition in AI is about controlling physical devices, not just software, and the established hardware players are not going to let anyone use their playbook without a fight.