← Back to the feed

Apple sues OpenAI alleging trade secret theft by former staff

Developed over time first seen 3 months ago

TechCrunch ·

Apple has filed a lawsuit against OpenAI in the U.S. District Court for the Northern District of California, accusing the AI company of trade secret theft and breach of contract. Apple alleges that OpenAI's senior leadership, including Chief Hardware Officer Tang Tan — a 24-year Apple veteran who was previously VP of product design for the iPhone and Apple Watch — directed a pattern of misconduct to extract confidential information from former Apple staff who moved to OpenAI. The case matters because OpenAI is rumoured to be developing its first hardware product, potentially an AI-driven smartphone that could pose one of the biggest threats yet to Apple's core hardware business.

According to the complaint, Tan allegedly used Apple's confidential project code names during recruitment, asked candidates to bring Apple hardware components to interviews, coached departing employees on evading Apple's security procedures, and sought details about unannounced products. A second former employee, engineer Chang Liu, is accused of failing to return an Apple laptop and using it to download confidential technical documents, then sharing information with other job candidates. Apple says it wrote to OpenAI in February but received no response, and it references OpenAI's acquisition last year of Jony Ive's device startup io in a $6.5 billion deal, as well as a proprietary metal finishing technique OpenAI allegedly used after misleading a partner. Apple is asking the court to bar OpenAI from using or disclosing its trade secrets, return confidential materials, and preserve evidence.

  • Apple sues OpenAI over alleged trade secret theft and contract breach.
  • Hardware chief Tang Tan accused of directing extraction of Apple secrets.
  • Case linked to OpenAI's rumoured iPhone-rivalling AI hardware plans.

New here? Start with this

Apple's iPhone maker has taken OpenAI, the company behind ChatGPT, to court in California, claiming OpenAI's leaders encouraged former Apple employees to hand over confidential information. At the centre of the claim is Tang Tan, OpenAI's Chief Hardware Officer, who spent 24 years at Apple working on products like the iPhone and Apple Watch before joining OpenAI.

The dispute is significant because OpenAI is widely believed to be working on its own physical device, possibly a smartphone built around artificial intelligence, after buying Jony Ive's hardware startup io last year for $6.5 billion. Such a product could compete directly with the iPhone, which has long been central to Apple's business.

Trade secrets are confidential business information, such as designs or techniques, that a company keeps private to maintain a competitive edge, and companies can sue if they believe others have taken this information unlawfully. Apple's lawsuit accuses OpenAI and some former staff of exactly this, seeking to use the courts to protect what it says is proprietary Apple knowledge now inside a rival firm.

Both sides, in good faith

The strongest fair case each way — we don't pick a winner.

The case for

Apple's claims warrant serious attention because the specific allegations suggest a coordinated pattern of misconduct beyond ordinary recruitment. If senior leadership at OpenAI actively used Apple's confidential code names during hiring, requested proprietary hardware be brought to interviews, and coached departing employees on circumventing security procedures, this indicates deliberate misappropriation rather than passive talent acquisition. Apple has legitimate rights to protect unreleased products and genuine innovations, and the allegation of a metal-finishing technique being misused after a misleading partnership suggests systemic disregard for others' intellectual property. Companies must be able to trust that confidential information remains protected when employees depart.

The case against

OpenAI's position, though not yet fully articulated, has merit because aggressive recruitment of talented staff is standard business practice and does not inherently constitute theft. Employees have rights to use their professional skills and general industry knowledge when changing employers, and the distinction between protected trade secrets and broader know-how is crucial—many of Apple's concerns may fall into the latter category. Competitive hiring, however vigorous, should not be conflated with illegal conduct, and Apple's lawsuit may reflect anxiety about a rival entering the hardware market rather than clear evidence of wrongdoing. Without OpenAI's account of specific incidents and context, the allegations remain one-sided claims rather than proven facts.

More coverage

AI Technology

Read the full article at the source →

Originally published by TechCrunch as “Apple sues OpenAI over alleged trade secret theft”.