Apple sued OpenAI in federal court on Friday, accusing the AI company of running a systematic campaign to steal the iPhone maker's hardware trade secrets. The suit names OpenAI's chief hardware officer, two former Apple engineers, and the design firm that Jony Ive built after leaving Apple. It lands as OpenAI is weighing its IPO timing — the company filed a draft S-1 in June targeting a valuation between $852 billion and $1 trillion, but has been leaning toward delaying the listing to 2027.

This wasn't ordinary hiring. Apple says OpenAI directed employees at every level to extract proprietary hardware secrets on the way out the door.

The recruiting included show-and-tell sessions with actual Apple parts. Tang Tan, OpenAI's chief hardware officer, spent 24 years at Apple designing the iPhone, Apple Watch, and iPod before leaving in 2024. Apple's complaint says that once there, he used Apple's internal project codenames in recruiting calls, asked job candidates to bring "actual parts" from Apple to interviews for show-and-tell sessions, and coached departing Apple employees on how to get around Apple's security protocols on the way out.

One engineer walked out with a thousand pages of Apple files. Chang Liu spent eight years as an Apple electrical engineer before joining OpenAI earlier this year. He allegedly kept his Apple-issued laptop after his last day, then discovered a software bug that kept giving him access to Apple's internal servers. He texted a colleague: "LOL, I found out I can access the [network storage], so funny." He then downloaded hardware designs, unreleased battery specs, manufacturing procedures, and product presentations. That colleague, Alyssa Peng, joined OpenAI's hardware team in April.

A February warning went unanswered. Apple says it sent OpenAI a letter in February flagging the trade secret concerns. OpenAI didn't respond, per the complaint, so Apple filed suit.

2. But OpenAI Says This Is What Competing Looks Like (Sam Altman, OpenAI)

Engineers carry knowledge when they change jobs. That's always been legal, and drawing criminal lines around it would punish competition.

The denial was short and flat. Spokesperson Drew Pusateri said the company has "no interest in other companies' trade secrets" and is "focused on building innovative technology that empowers people everywhere." On X, CEO Sam Altman was more direct: "i am not afraid of apple, but i have tremendous respect for them."

Both statements lean on a familiar Silicon Valley argument. Engineers carry knowledge between jobs, and that's always been legal. Drawing criminal lines around it would punish competition, not protect genuine secrets. OpenAI built its hardware operation partly through the $6.5 billion acquisition of io Products, the design firm Jony Ive co-founded after leaving Apple. Apple's suit names io Products as a defendant but doesn't accuse Ive of wrongdoing.

3. Still, the Lawsuit Threatens OpenAI's IPO (Reed Albergotti, Semafor)

A trade secret claim naming the chief hardware officer lands at the worst possible moment for a company in the middle of an IPO filing.

The lawsuit landed in the middle of an IPO filing. The company filed its draft S-1 with the SEC in June. Institutional investors scrutinize exactly this kind of lawsuit in pre-IPO due diligence. The suit names the chief hardware officer as a defendant and may taint OpenAI's core hardware product with stolen-IP claims. Reed Albergotti, a tech reporter at Semafor, writes that, at first glance, Apple "appears to have a pretty good case if it can prove everything in court," but also flags the structural difficulty: "trade secret litigation in Silicon Valley is often ineffective because information finds a way out."

The lawsuit goes wider than two engineers. Apple claims over 400 of its former employees now work at OpenAI. It also accuses OpenAI of approaching Apple's manufacturing partners using Apple's proprietary information — including a confidential metal-finishing technique — while misleading those partners into thinking Apple had given permission. Apple is seeking an injunction that could block OpenAI's hardware products from using the disputed designs, on top of monetary damages.

Where This Lands

Apple's complaint is unusually specific. There's an executive who asked job candidates to bring actual Apple parts in for show-and-tell, an engineer who texted a colleague about accessing Apple's servers after his last day, and a February warning letter OpenAI never answered. Courts have historically drawn a hard line between theft directed by a company and individual employees going rogue — that's OpenAI's best defense. The legal standard for trade secret misappropriation is also harder to meet than Apple's complaint suggests.

Sources