Apple sues OpenAI alleging theft of trade secrets by former employees

Apple filed a lawsuit in Northern California federal court accusing OpenAI of benefiting from the theft of its trade secrets by former employees. The 41-page complaint alleges that Apple’s confidential product development, manufacturing, supply chain, and technology research constitute some of the most valuable intellectual assets in American business.

The lawsuit specifically names three former Apple employees who later joined OpenAI: Tang Tan, a former Apple Watch vice president with 24 years at Apple who became OpenAI’s chief hardware officer after OpenAI acquired Jony Ive’s hardware company, io; Chang Liu, a former systems electrical engineer for iPhone with eight years at Apple; and Yu-Ting “Alyssa” Peng, another former Apple employee whose tenure is less documented.

According to the complaint, the alleged misappropriation included requests by Tan for prospective employees to bring Apple hardware to OpenAI interviews for “show and tell” and coaching Apple employees on how to avoid offboarding security procedures. The lawsuit does not specify which, if any, Apple hardware trade secrets may have been incorporated into OpenAI’s unreleased device.

The legal action arrives as OpenAI faces a confluence of challenges, including investor pressure to achieve profitability, a confidential SEC filing for a potential IPO, and an ongoing effort to launch a hardware product in 2027 following a $6.5 billion acquisition of io, the hardware startup founded by former Apple designer Jony Ive.

Legal experts suggest OpenAI’s litigation risks are far from resolved. Avery Williams, cochair of the trade secret practice area at McKool Smith, noted that OpenAI’s broader legal exposure will persist until higher courts address the fair use question for AI training, calling it “a trillion-dollar question.”

The lawsuit is the latest in a series of legal challenges for OpenAI, which has also faced litigation from Elon Musk, the family of a teenager who died by suicide after using ChatGPT, The New York Times and other publishers over alleged copyright infringement, and a separate lawsuit from the company Iyo related to its acquisition of io.