The growing rivalry between Apple and OpenAI has now moved from product launches to the courtroom. Apple has filed a lawsuit accusing OpenAI and two former Apple executives of misusing confidential trade secrets to speed up the company’s push into AI-powered consumer hardware. The legal battle marks one of the biggest disputes yet between two companies that, until recently, were also business partners through ChatGPT’s integration into Apple’s ecosystem.
At the centre of the lawsuit is Apple’s claim that confidential hardware designs, manufacturing techniques and supplier information were improperly taken by former employees before joining OpenAI. While OpenAI has firmly denied the allegations, the case could have major implications for the future of AI hardware as competition between Silicon Valley’s biggest companies continues to intensify.
Apple accuses OpenAI of benefiting from confidential information
The lawsuit, filed in the U.S. District Court for the Northern District of California, alleges that OpenAI orchestrated a coordinated effort to obtain Apple’s confidential information through former employees, recruitment strategies and supplier relationships. According to Apple, the objective was to accelerate OpenAI’s plans to develop consumer AI devices that could eventually compete directly with products like the iPhone.
Responding to the allegations, OpenAI rejected Apple’s claims. The company said, “We have no interest in other companies’ trade secrets. We remain focused on building innovative technology that empowers people everywhere.”
Apple has named two former executives in the lawsuit. One is Chang Liu, who previously worked as a senior system electrical engineer, while the other is Tang Yew Tan, Apple’s former Vice President of Product Design responsible for work on the iPhone and Apple Watch during much of his 24-year career at the company.
According to Apple’s complaint, Liu allegedly failed to return a company-issued laptop and later accessed Apple’s internal systems using what the company described as an authentication flaw, downloading confidential hardware files. Apple also claims Tan emailed himself confidential supplier information and internal industry summaries before leaving the company. The lawsuit further alleges that Tan encouraged Apple employees attending OpenAI interviews to bring hardware components for what were described as “show and tell” sessions.
Apple also argues that employing former staff members does not automatically grant access to confidential information. The company states in its filing, “That OpenAI now employs people who were once entrusted with Apple’s trade secrets does not entitle OpenAI to use that information to jumpstart its hardware efforts.”
AI hardware race adds new pressure to the rivalry
The lawsuit highlights how rapidly the competition between Apple and OpenAI has evolved. While the two companies currently cooperate through ChatGPT’s integration with Siri and Apple Intelligence, both are also developing technologies that could eventually compete for the same customers.
Industry analysts believe OpenAI is actively expanding beyond software into dedicated AI hardware. Last year, the company strengthened those ambitions by acquiring hardware startup io Products, founded by legendary former Apple designer Jony Ive, in a deal reportedly worth $6.5 billion. Although Ive is not named in Apple’s lawsuit, the acquisition significantly increased speculation that OpenAI is preparing its own consumer AI device.
Apple’s filing also notes that more than 400 former Apple employees now work at OpenAI. While hiring employees from competitors is generally legal in California, Apple argues the issue centres on whether confidential business information accompanied those employees after they changed companies.
Technology analyst Paolo Pescatore believes the lawsuit reflects a much larger strategic battle taking shape across the AI industry. According to him, Apple increasingly views OpenAI as a future competitor rather than simply a software partner, while OpenAI appears focused on reducing its dependence on the iPhone ecosystem by building direct relationships with consumers through its own hardware products.
Legal experts expect a closely watched case
Legal experts believe the case could become one of the most significant trade secret disputes involving artificial intelligence to date. Stanford Law School professor Mark Lemley noted that hiring employees from rival companies is not illegal under California law. However, he also pointed out that the situation changes dramatically if confidential documents were taken and later used by another company.
Rutgers Law School professor Camilla Hrdy suggested the lawsuit could become even more complex because most AI-related legal disputes so far have focused on software rather than physical hardware. She believes additional details are likely to emerge as the case moves through the courts, making it one of the industry’s most closely watched legal battles.
The lawsuit arrives after months of growing tension between Apple and OpenAI despite their existing partnership. Apple recently completed the rollout of its long-awaited Siri overhaul powered by Apple Intelligence, while OpenAI continues investing heavily in consumer hardware. As both companies race to shape the future of AI-powered devices, the courtroom may now become just as important as the technology itself.
Whether Apple’s allegations are ultimately proven remains to be seen, but the case has already raised fresh questions about trade secrets, employee mobility and intellectual property in one of the fastest-moving sectors of the technology industry.
