Apple Sues OpenAI, Alleging It Stole Trade Secrets

[1]

Introduction

Apple filed a federal trade secret misappropriation lawsuit against OpenAI in the Northern District of California accusing the AI company of poaching hundreds of employees and stealing proprietary hardware designs, a scheme that Apple alleges occurred at “every level.”[2]  The tech giants partnered together in 2024 to integrate ChatGPT into Apple’s Siri, but now find themselves as adversaries in a legal conflict involving alleged trade secret theft and breach of contract by former employees.[3]

What Happened?

Apple and OpenAI began a partnership in 2024 integrating ChatGPT into Apple software, particularly Siri.[4] This project closely intertwined the two companies to boost iPhone sales, drive an upgrade cycle, and potentially cement Apple as a leader in consumer-oriented AI while promoting ChatGPT to all iPhone users.[5]  The integration officially released on iPhone in October 2025.[6]

OpenAI has since began pursuing ways to create consumer hardware beyond ChatGPT in its 2024 “io” venture, with the specific goal of creating an AI hardware device that is “less socially disruptive than the iPhone.”[7]  On May 21, 2025, OpenAI announced its merger with io, now documented as the AI company’s largest acquisition to date.[8] 

According to Apple, the alleged misconduct perpetrated “at every level,” involving multiple individuals, including members of OpenAI’s technical staff and its Chief Hardware Officer.[9]  Apple’s complaint alleges that its former employees who joined OpenAI stole the company’s trade secrets to benefit their new employer’s hardware development efforts.[10]

Tang Tan, the former Apple Vice President of Product Design for iPhone and Apple Watch and one of the four founders of io who subsequently joined OpenAI as the Chief Hardware Officer, is a named defendant in this suit.[11]

Chang Liu, also named in the lawsuit as a current OpenAI employee, spent the last eight years at Apple as a Senior System Electrical Engineer, entrusted with Apple’s most sensitive and confidential trade secret information.[12]

Apple’s suit covers OpenAI’s recruiting practices, including coaching on what to say and bring to OpenAI interviews while using internal Apple codenames, as well as departure conduct, including "the dreaded walkout" coaching, advising employees not to sign exit paperwork, and the circulation of an internal "Need to Know" departure-protocol document.[13] Apple also points to employees’ post-departure conduct marking the alleged start of the unauthorized access, where a security bug was exploited to retain Apple’s internal files after transitioning to OpenAI.[14] The allegations culminate in third-party downstream conduct, where OpenAI allegedly misled a manufacturing partner into performing Apple’s proprietary metal-finishing technique, and approaching a second supplier with insider terminology.[15]

If true, these allegations raise substantial concerns under trade secret law.  Yet this case remains fully contested: OpenAI responded publicly in an August 3, 2026 blog post titled “Apple is getting this wrong.”[16]  OpenAI disputed Apple’s claim that its outreach went unanswered, asserting that Apple’s outside counsel had emailed the wrong person after confusing two employees with similar last names.[17] 

OpenAI also presented text messages claiming it shows Apple employees reaching out to Liu after his departure to request help locating files and technical information needed for their ongoing work at Apple.[18]  As for Tan, OpenAI maintains he has “always been clear with the team that we do not want, and must not use, any confidential information from other companies.”[19]

OpenAI moved to dismiss on August 6, 2026, and on September 1, 2026, filed an opposition to Apple’s preliminary injunction motion, contending that much of what Apple describes amounts simply to ordinary recruiting conduct rather than trade secret theft.[20]

The Defend Trade Secrets Act (“DTSA”)

Apple brings its case against OpenAI, io, Tan, and Liu under the Defend Trade Secrets Act (“DTSA”), which allows trade secret owners to sue in federal court rather than relying on state law alone.[21]

To prevail, Apple must establish that the allegedly stolen information qualifies for protection.  Apple must show that the information (1) derives independent economic value from not being generally known, (2) is not readily ascertainable by proper means, and (3) was subject to reasonable measures to keep it secret.[22]

If the information qualifies as a trade secret, Apple must then show that the information was misappropriated under the statute, meaning that the defendants acquired the information through “improper means.”  Under the statute improper includes acts like theft and breach of duty of confidentiality, while excluding legitimate methods like independent derivation.[23]

Further, Apple’s complaint asserts an alternative path for relief through a breach of contract claim against Tan and Liu as individual defendants, alleging that they violated the confidentiality provisions of their Intellectual Property Agreements.[24]

Where This Leaves Us

On paper, Apple’s complaint reads as a stronger misappropriation claim than many trade secret disputes that rely on an employee’s memory or skill. Rather than looking to an “inevitable disclosure” theory, which is the harder-to-prove idea that an employee cannot help but use what they know, Apple alleges specific, documented acts of acquisition and use: an exploited authentication bug, downloaded files, and interview questions built around Apple’s internal project codenames.[25]  Courts, particularly in California, tend to be skeptical of trade secret claims resting on general know-how, but claims built on actionable conduct fare better.[26]

Apple's complaint also reflects a deliberate litigation strategy, casting a broad net to include six separate claims spanning both individual defendants and the corporate entities.[27]  Liu and Tan face DTSA claims for their own alleged conduct, while OpenAI and io face parallel claims as the entities that allegedly benefited.[28]  Apple’s claim that this misconduct was "normalized and exemplified by leadership" shows it is holding OpenAI accountable for a systemic company culture rather than the actions of one rogue hire.[29]

OpenAI has since moved to dismiss, opposed Apple's request for a preliminary injunction, and publicly rejected Apple's framing of the events.[30]  Much of what makes the initial complaint compelling came from Apple's own internal investigation; what discovery surfaces from OpenAI's side remains to be seen.

Whatever the outcome, this case is a reminder that in the AI hardware race, the real trade secrets are not always the algorithms.  Sometimes, they are the metal-finishing techniques nobody thought to patent

References

[1] Photo by Laurenz Heymann, Apple Logo on Glass Window, Unsplash (Mar. 26, 2020),  https://unsplash.com/photos/apple-logo-on-glass-window-wAygsCk20h8

[2] See Complaint at X, Apple Inc. v. Liu, No. 5:26-cv-07078-VKD (N.D. Cal. July 10, 2026); see also Kif Leswing & MacKenzie Sigalos, Apple Sues OpenAI Over Alleged Trade Secret Theft, CNBC (July 11, 2026, at 00:09 EDT), https://www.cnbc.com/2026/07/10/apple-openai-lawsuit-trade-secrets.html.

[3] See OpenAI and Apple Announce Partnership to Integrate ChatGPT into Apple Experiences, OpenAI (June 10, 2024), https://openai.com/index/openai-and-apple-announce-partnership/.

[4] See id.

[5] See id. 

[6] See Kif Leswing, Apple Launches Its ChatGPT Integration with Siri, CNBC (Dec. 11, 2024, at 16:58 EST), https://www.cnbc.com/2024/12/11/apple-launches-its-chatgpt-integration-with-siri.html.

[7] See Tripp Mickle, After Apple, Jony Ive Is Building an Empire of His Own, N.Y. Times (Oct. 8, 2024), https://www.nytimes.com/2024/09/21/technology/jony-ive-apple-lovefrom.html.

[8] See Mike Isaac & Cade Metz, OpenAI and Jony Ive Agree to $6.5 Billion Deal for AI Devices, N.Y. Times (May 21, 2025), https://www.nytimes.com/2025/05/21/technology/openai-jony-ive-deal.html; see also Graham Fraser, ‘World’s Greatest Designer’ Jony Ive Joins to ‘Reimagine’ Computers, BBC (May 22, 2025), https://www.bbc.com/news/articles/c5y66yemjdmo.

[9] See Complaint at ¶ 1, Apple Inc. v. Liu, No. 5:26-cv-07078-VKD, (N.D. Cal. July 10, 2026).

[10] See id. at ¶ 13.

[11] See Sarah Perez, Apple Sues OpenAI Over Alleged Trade Secret Theft, TechCrunch (July 10, 2026, at 14:00 PDT), https://techcrunch.com/2026/07/10/apple-sues-openai-over-alleged-trade-secret-theft/; see also Matt O’Brien & Michael Liedtke, OpenAI Recruits Legendary iPhone Designer Jony Ive to Work on AI Hardware in $6.5B Deal, AP News (May 21, 2025, at 17:25 EDT), https://apnews.com/article/jony-ive-openai-chatgpt-52c72786e54f0ead8b04d037c30d6754.

[12] See Complaint, supra note 9, at ¶ 4.

[13] See id. ¶¶ 73, 84.

[14] See id. ¶¶ 5, 57.

[15] See id. ¶¶ 80–83.

[16] See Apple is Getting this Wrong, OpenAI (Aug. 3, 2026), https://openai.com/index/apple-is-getting-this-wrong/.

[17] See id.

[18] See id.

[19] See id.

[20] See Docket, Apple Inc. v. Liu, No. 5:26-cv-07078-VKD (reflecting Oct. 1, 2026 hearing date).

[21] See 18 U.S.C. §§ 1836-39 (2018).

[22] See id. § 1839(3).

[23] See id. § 1839(5)-(6).

[24] See Complaint, supra note 9, at ¶¶ 138–156.

[25] See id, at ¶¶ 57-59, 69–70; see generally PepsiCo, Inc.  v. Redmond, Co, 54 F.3d 1262 (7th Cir. 1995) (holding trade secret misappropriation can occur when new employment will result in disclosure of trade secrets).  

[26] See Morlife, Inc. v. Perry, 56 Cal. App. 4th 1514, 1521–22 (1997) (explaining that information generally known or readily ascertainable through proper means does not qualify as trade secret).

[27] See Complaint, supra note 9, at ¶¶ 25–39.

[28] See id. ¶¶ 86–137.

[29] See id. ¶ 13.

[30] See Apple Is Getting this Wrong, supra note 16.