What surely is the first time in its 50-year history, Apple has sued its close partner, one that it shared stage with at iPhone launch and whose technology company used inside iPhones. Apple has sued ChatGPT-maker OpenAI for trade secret theft. The iPhone maker accuses the artificial intelligence (AI) startup and its hardware chief of engaging in a coordinated campaign to steal information about upcoming products. Though the two companies never had a partnership to develop hardware devices, they have worked together on AI features used by the iPhone and other products. That relationship was announced at Apple’s Worldwide Developers Conference two years ago, with OpenAI CEO Sam Altman sitting in the audience. At the time, Apple software head Craig Federighi referred to the startup as the “pioneer and market leader” in AI and the companies seemed poised for a broad strategic partnership.In a lawsuit filed Friday, July 10, Apple said that OpenAI encouraged Apple employees to share information, components, drawings and other materials related to upcoming products. As part of the lawsuit, filed in the Northern District of California, Apple also named Tang Tan, the chief hardware officer at OpenAI. Tang was previously Apple’s vice president of product design, leading development of the iPhone, smartwatch, AirPods and several other offerings in the company’s hardware engineering division. The suit also named a former iPhone hardware engineer, Chang Liu, saying he provided materials. Liu joined OpenAI in January. Tan originally left the iPhone maker in 2024 to co-found an AI devices startup called io Products Inc. As part of the defections to OpenAI, the top executive in charge of Apple’s smart glasses effort left last month.Tensions have been growing between the two companies for the past year — reportedly worsened by OpenAI enlisting former Apple design visionary Jony Ive to help develop devices. Alongside Ive and Apple design veteran Evans Hankey. OpenAI acquired the startup last year for $6.5 billion. Ive and Hankey aren’t named in the lawsuit. Bloomberg News also recently reported that OpenAI was considering its own legal options against Apple. The AI startup failed to see the expected benefits from the partnership and considered sending a breach of contract notice.Apple’s lawsuit claims that OpenAI, which is poised for an initial public offering (IPO) in the coming months, has lured away a vast number of Apple employees. It claims that more than 400 former Apple workers are now at OpenAI. “At every level, from members of its technical staff to its chief hardware officer, and in coordination with business partners, OpenAI has been stealing Apple’s trade secrets and confidential information,” the Cupertino, California-based tech giant said in the suit. Apple described its findings as “the tip of the iceberg,” saying it had limited visibility into what was happening behind OpenAI’s closed doors. “As a natural result, OpenAI’s nascent hardware business now rests on the shakiest of foundations, rotten to its core by its illegal reliance on misappropriated trade secrets.”
What does Apple’s lawsuit want
Apple is reportedly demanding that OpenAI cease its practices and destroy any proprietary materials. Apple, which is seeking a jury trial in the case, also wants OpenAI to redesign upcoming products so they don’t include any of its technology. Apple said that Tan encouraged employees to provide information about upcoming products in job interviews. “Over several weeks, while developing hardware for OpenAI, Mr. Liu surreptitiously accessed and downloaded dozens of Apple’s confidential hardware-related files, including voluminous, detailed information about unreleased products, engineering presentations, technical specifications and proprietary project data,” according to the lawsuit.Apple said that its employees were “actively coached” by OpenAI on how to handle their exits from the company.“OpenAI has counseled departing employees not to disclose their next employer and given advice on how to avoid the ‘dreaded walk out’ that would promptly remove them from the company rather than giving them a standard two weeks in which they could continue to access Apple’s confidential information and trade secrets,” according to the suit.
What hardware is OpenAI building
OpenAI has never said exactly what type of device it is building, but has described it as an effort to find a new way to interact with AI that goes beyond “traditional products and interfaces.” It’s part of a broader push to create a physical embodiment of the latest AI advances, a decade after Amazon and Google introduced screen-free talking speakers into homes. The lawsuit claims the effort was built partly on knowledge stolen from Apple.
Apple: Efforts to settle matter with OpenAI out of court failed
Apple reportedly said that it attempted to resolve the OpenAI dispute out of court months ago, asking it to cease the efforts and eliminate any proprietary materials. It said that it didn’t receive a response, leading Apple to file the lawsuit. “Significant evidence has emerged suggesting individuals employed by OpenAI wrongfully took Apple’s secret and confidential information regarding our unreleased technologies, processes and products,” the company said in a statement.
