AI hardware race turns legal: Apple sues OpenAI over ‘stolen’ trade secrets

A decade after Amazon and Google introduced screen-free smart speakers, the race to build the next AI hardware device has drawn in Apple and OpenAI — this time in a courtroom. Apple filed a lawsuit against OpenAI on Friday, July 10, in the Northern District of California, marking what is reportedly the first time in its 50-year history that the company has sued a close partner.

OpenAI has never revealed exactly what kind of device it is developing, describing the effort only as a search for new ways to interact with AI beyond ‘traditional products and interfaces.’ Apple’s suit alleges that project was built partly on trade secrets taken from its own hardware division.

The lawsuit names Tang Tan, OpenAI’s chief hardware officer and a former Apple vice president of product design who led development of the iPhone, smartwatch and AirPods before leaving in 2024 to co-found io Products Inc, later bought by OpenAI for $6.5 billion. Also named is Chang Liu, a former iPhone hardware engineer who joined OpenAI in January and allegedly downloaded dozens of confidential Apple files.

Apple says more than 400 of its former staff now work at OpenAI, and accuses the company of coaching departing employees on how to exit without losing extended access to confidential systems. Tensions between the two companies have reportedly grown over the past year, worsened by OpenAI’s hiring of former Apple design figures to help build devices, though none of them are named as defendants in the suit.

Apple is seeking a jury trial and wants OpenAI to stop the alleged practices, destroy any proprietary materials and redesign upcoming products to strip out Apple’s technology. The company says it tried to resolve the dispute privately months before filing suit but received no response.