rotten to its core by its illegal reliance on misappropriated trade secrets
In the relentless churn of the AI talent wars, Apple has drawn a legal line in the sand, filing suit against OpenAI and two of its senior hardware leaders — former Apple veterans Tang Tan and Chang Liu — alleging that confidential knowledge about unreleased products and manufacturing methods was carried out the door and put to work for a competitor. The complaint, filed in federal court in Northern California, reflects a tension as old as industry itself: the question of what a person truly owns when they leave one world and enter another. Apple's silence from OpenAI after raising concerns in February appears to have transformed a private grievance into a public reckoning, arriving at a moment when OpenAI's hardware ambitions, its investor relationships, and its partnership with Apple itself all hang in uncertain balance.
- Apple alleges that Tang Tan, OpenAI's Chief Hardware Officer, began misappropriating secrets before he even resigned — emailing himself supplier data and later coaching active Apple employees during job interviews to bring physical parts for 'show and tell' sessions.
- Engineer Chang Liu allegedly never returned his Apple-issued laptop and used it to quietly download dozens of confidential files, including unreleased product specs and engineering presentations, after joining OpenAI.
- Apple reached out to OpenAI in February requesting an investigation and corrective action; OpenAI never responded, a silence the lawsuit treats as evidence of institutional indifference rather than ignorance.
- The suit's language is unusually sharp, accusing OpenAI's hardware business of resting on a foundation 'rotten to its core' — signaling Apple intends this to be more than a warning shot.
- The lawsuit lands at a precarious moment for OpenAI: the company is pursuing an IPO, burning through capital, building toward AI hardware products like earbuds and a smartphone, and maintaining a live partnership with Apple on ChatGPT-Siri integration — all of which now face legal and reputational turbulence.
Apple filed suit in federal court in California's Northern District on Friday, accusing OpenAI of systematically stealing trade secrets through two former Apple employees now in senior roles at the AI company. The defendants are Tang Tan, OpenAI's Chief Hardware Officer and a 24-year Apple veteran who once oversaw product design for iPhone and Apple Watch, and Chang Liu, a software engineer who spent eight years at Apple before making the move.
The alleged misconduct, according to Apple's complaint, began before either man had officially departed. Tan reportedly emailed himself supplier information while still on Apple's payroll, and once at OpenAI, used internal Apple project codenames during candidate interviews — asking applicants who still worked at Apple about unannounced products. More strikingly, the suit claims Tan encouraged these candidates to bring physical Apple components to their interviews for what he called 'show and tell' sessions, effectively turning the hiring process into an intelligence-gathering operation.
Liu's alleged conduct centered on a laptop he never returned. Using the Apple-issued device after leaving the company, he reportedly accessed shared network folders and downloaded dozens of confidential files — unreleased product specifications, engineering presentations, and proprietary technical data. Apple acknowledged in its filing that it may not have full visibility into how deeply this information has penetrated OpenAI's operations.
Apple had attempted a quieter resolution. In February, while its internal investigation was ongoing, the company wrote to OpenAI asking what safeguards existed to prevent misuse of its confidential materials and requesting corrective action. OpenAI never replied. That silence, Apple suggests, speaks for itself.
The lawsuit arrives at a fraught moment for OpenAI. The company is actively developing hardware products — AI earbuds and a smartphone — that could diversify revenue beyond subscriptions, and it is simultaneously burning through capital while preparing for a potential IPO. The existing partnership between OpenAI and Apple, which routes complex Siri queries through ChatGPT, adds an ironic dimension to the conflict. OpenAI also faces separate legal pressure from publishers over training data practices and from individuals over chatbot-related harms. Apple's suit, with its pointed allegations and its potential to cloud both OpenAI's valuation and its hardware ambitions, may prove to be among the most consequential challenges the company has yet faced.
Apple filed suit against OpenAI on Friday, accusing the company of systematically stealing its trade secrets through former employees now working in leadership roles at the AI startup. The complaint, lodged in federal court in California's Northern District, names two individuals: Tang Tan, OpenAI's Chief Hardware Officer who spent 24 years at Apple, and Chang Liu, a software engineer who worked there for eight years before joining OpenAI.
The lawsuit arrives at a moment when tech companies are locked in a fierce competition for AI talent, with billion-dollar hiring campaigns pulling experienced engineers from one firm to another. But Apple's filing marks the first major legal action alleging that departing employees have deliberately carried their former employer's secrets across the industry divide. During his time at Apple, Tan held the title of vice president of product design for iPhone and Apple Watch, positions that gave him access to what Apple describes as the company's most sensitive initiatives, trusted supplier relationships, proprietary manufacturing methods, and products not yet released to the public.
According to the complaint, Tan's misconduct began before he even left Apple. He allegedly emailed himself information about Apple's suppliers while still employed there. Once at OpenAI, he reportedly used internal project codenames when interviewing candidates who still worked at Apple, asking them about unannounced products. The lawsuit goes further, claiming Tan instructed job candidates still employed by Apple to bring "actual parts" from the company to their OpenAI interviews for what he called "show and tell" sessions—opportunities for him and his team to extract additional confidential details.
Liu's alleged conduct followed a similar pattern. The senior system electrical engineer never returned his Apple-issued work laptop after departing, the suit claims. Using that device, he then accessed Apple's shared network folders and surreptitiously downloaded dozens of confidential files related to hardware—unreleased product information, engineering presentations, technical specifications, and proprietary project data. Apple characterized these instances as merely the surface of a deeper problem, suggesting the company lacks full visibility into what has transpired inside OpenAI's offices. The filing contains pointed language, alleging that OpenAI's hardware business "rests on the shakiest of foundations, rotten to its core by its illegal reliance on misappropriated trade secrets."
Apple first raised concerns in February, when its investigation was underway. The company wrote to OpenAI asking what safeguards the startup had in place to prevent unauthorized access to Apple's confidential materials. Apple requested that OpenAI investigate the situation and take corrective action. According to the filing, OpenAI never responded. The lawsuit seeks to halt what Apple characterizes as ongoing theft of trade secrets and to prevent further misuse of the information already obtained.
The timing carries significant weight. OpenAI has been aggressively pursuing hardware ambitions, with plans for AI earbuds and a smartphone—products that could generate substantial revenue streams beyond its current subscription model. The company is also burning through investor capital at a rapid pace, making new revenue sources strategically important. Separately, OpenAI and Apple have an existing partnership involving ChatGPT integration into Siri for handling more complex queries; the lawsuit's implications for that collaboration remain unclear. Adding another layer of complexity, designer Jony Ive's company, io Products, merged with OpenAI in 2025, though Ive is not named in the filing.
OpenAI faces mounting legal pressure from multiple directions. Publishers have sued the company for allegedly using copyrighted works to train ChatGPT without permission and for withholding information about its training methods. A mother sued OpenAI earlier this year, claiming her daughter's death resulted from interactions with the chatbot. As OpenAI considers going public, Apple's lawsuit could prove particularly damaging—not only to the company's reputation but potentially to its hardware ambitions and the valuation investors might assign to the business.
Notable Quotes
Apple's investigation has revealed that Mr. Tan has been methodically using Apple's confidential information to benefit OpenAI— Apple's complaint filing
OpenAI's nascent hardware business now rests on the shakiest of foundations, rotten to its core by its illegal reliance on misappropriated trade secrets— Apple's complaint filing
The Hearth Conversation Another angle on the story
Why does it matter that these two specific people left Apple for OpenAI? Couldn't any engineer move between companies?
They could, and they do all the time. But Tan wasn't just any engineer—he was vice president of product design for iPhone and Apple Watch. He knew where every supplier was, what every unreleased product looked like, how things were manufactured. That's not information you can unlearn.
So the lawsuit is saying he deliberately took that knowledge with him?
More than that. Apple alleges he was methodical about it. He emailed himself supplier information before he left. Then at OpenAI, he used Apple's internal codenames when interviewing current Apple employees, asking them about products that hadn't been announced yet. That's not passive knowledge transfer—that's active extraction.
What about the laptop situation with Liu?
He never returned it. Then he used it to access Apple's network folders and downloaded dozens of files about unreleased hardware, specs, technical data. The question is whether he did that on his own initiative or whether someone at OpenAI asked him to.
Does OpenAI actually need Apple's secrets to build hardware?
That's the real question. OpenAI is trying to build earbuds and a smartphone. Those are complex products. Whether they need Apple's specific designs or just wanted to avoid reinventing the wheel—we don't know yet. But Apple is saying OpenAI's entire hardware business is built on stolen information.
What happens to the Apple-ChatGPT partnership now?
That's unclear. They have an integration deal where ChatGPT helps Siri answer harder questions. A lawsuit like this doesn't automatically kill a partnership, but it certainly strains it. Why would Apple want to deepen ties with a company it's accusing of theft?
Is this going to hurt OpenAI's IPO plans?
Almost certainly. Investors don't like legal risk, especially not allegations that a company's core business strategy rests on stolen information. If a jury agrees with Apple, it could reshape what OpenAI's hardware business is actually worth.