Apple bites OpenAI with lawsuit

Apple has accused OpenAI of stealing trade secrets as it seeks to build its own hardware for ChatGPT, a major rupture in a partnership between the iPhone maker and the artificial intelligence company.

Apple said in the lawsuit filed Friday in a California federal court that OpenAI encouraged Apple employees it was recruiting to share confidential information, even guiding how to avoid scrutiny when taking jobs at the other company.

“This case is about Apple’s former employees stealing Apple’s trade secrets for the benefit of OpenAI,” the filing says. “Apple brings this suit to put a stop to it.”

Two former Apple employees who now work for OpenAI are also named as defendants. One is Tang Tan, who helped design the iPhone, Apple Watch and iPod and is now OpenAI’s chief hardware officer. The other is Chang Liu, a former electrical engineer Apple says it entrusted with some of its most sensitive product development efforts before Liu left Apple to join OpenAI earlier this year.

OpenAI said it is still reviewing the filing, but spokesperson Drew Pusateri said in a statement that OpenAI has “no interest in other companies’ trade secrets. We remain focused on building innovative technology that empowers people everywhere.”

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.

“OpenAI’s nascent hardware business now rests on the shakiest of foundations, rotten to its core by its illegal reliance on misappropriated trade secrets,” the lawsuit says.

Apple said it began investigating whether some of its confidential information was compromised and “uncovered a pattern of theft” of Apple’s trade secrets by former employees who moved on to positions at OpenAI.

The lawsuit alleges both Liu and Tan accessed Apple’s confidential company information and files while working at OpenAI. Among the allegations, Apple claims Liu accessed and downloaded several confidential hardware-related files on an Apple-issued device he kept after departing. It also alleges Tan directed job candidates who were still working for Apple to bring “Actual parts” from Apple to their interviews at OpenAI.

Apple said in the lawsuit that it reached out to OpenAI in February to raise its concerns early in its investigation, but said that OpenAI did not respond.

An Apple spokesperson said in a statement Friday that the company will “always defend our teams’ hard work and innovations, and we are taking all appropriate steps to do so.”

A partnership with Apple has edged toward rivalry

Apple sought help from OpenAI several years ago as it was behind in the AI race sparked by ChatGPT’s arrival. The two companies partnered in 2024 to use ChatGPT as an AI-powered “answer engine” on the iPhone when the built-in Siri technology couldn’t satisfy user needs.

More recently, the partnership has veered toward rivalry.

As part of its expansion efforts, OpenAI recruited former Apple designer Jony Ive to oversee a project to build an AI-powered device that many analysts believe could eventually challenge Apple’s products.

Last year, OpenAI announced it was working on a secret hardware collaboration with Ive to pioneer a new way of communicating with artificial intelligence. As part of the collaboration, OpenAI acquired io Products, a product and engineering company co-founded by Ive, Tan and two others, in a deal valued at nearly $6.5 billion.

That led a little-known tech startup iyO Inc. to sue Ive and OpenAI CEO Sam Altman for trademark infringement due to the similar-sounding name and the firms’ past interactions. The startup also sued one of its own former employees for allegedly leaking a confidential drawing of iyO’s unreleased product, and it later added trade secret theft claims against Tan to the lawsuit.

Apple’s lawsuit also names io Products as a defendant. Lawyers who previously represented the firm and Tan referred The Associated Press to OpenAI for comment.