Apple’s Ex-Partner OpenAI Hit With ‘Rotten to the Core’ Trade‑Secrets Lawsuit Over Future of Post‑iPhone Devices

• From partners to courtroom adversaries
• Apple’s allegations: bugs, laptops and “show and tell”
• OpenAI’s denial and the stakes for AI hardware
• A broader fight over Silicon Valley’s unwritten rules

Apple’s Ex-Partner OpenAI Hit With ‘Rotten to the Core’ Trade‑Secrets Lawsuit Over Future of Post‑iPhone Devices
Apple’s quiet hardware rivalry with OpenAI has erupted into a courtroom fight that could reshape how Silicon Valley poaches talent and protects secrets.

§From partners to courtroom adversaries

About a year and a half ago, Apple and OpenAI were partners; now they are “in an all-out legal war over the post-smartphone device future,” as one observer put it. Apple’s turn against its former ally began building as OpenAI ramped up plans for its first consumer device, a move that helped drive its $6.5 billion acquisition of Jony Ive–linked hardware startup io in 2025.

On July 10, Apple filed a 41-page complaint in federal court in Northern California, accusing OpenAI and io of a “pattern of theft” directed by senior leadership, including former Apple hardware executive Tang Tan, now OpenAI’s chief hardware officer.

§Apple’s allegations: bugs, laptops and “show and tell”

Apple says former iPhone engineer Chang Liu left for OpenAI in January 2026 but secretly kept an Apple-issued laptop and exploited a “rare” authentication bug to keep accessing Apple’s cloud storage for weeks. During that time, he allegedly downloaded “dozens of Apple’s confidential hardware-related files, including voluminous, detailed information about unreleased products, engineering presentations, technical specifications, and proprietary project data.”

The complaint also portrays OpenAI’s recruiting as intelligence-gathering. Apple alleges Tan used internal Apple codenames and asked candidates to bring “actual parts” — “batteries, logic boards, and glass samples” — to interviews for “show and tell,” while recruiters told candidates to prepare deep dives based on confidential Apple documents. The suit claims OpenAI’s “nascent hardware business now rests on the shakiest of foundations, rotten to its core by its illegal reliance on misappropriated trade secrets.”

§OpenAI’s denial and the stakes for AI hardware

OpenAI counters that it has “no interest in other companies’ trade secrets” and is “not aware of any evidence that this complaint has merit,” insisting it remains “focused on building innovative technology that empowers people everywhere.” It also says its AI models are trained on public data and that it has “robust measures” to protect intellectual property.

Legal experts note Apple’s case leans heavily on the Defend Trade Secrets Act and could become a vehicle to “open OpenAI’s black box” through discovery, revealing what, if anything, was actually used in device development. The litigation could delay OpenAI’s hardware launch and add uncertainty around its anticipated IPO.

§A broader fight over Silicon Valley’s unwritten rules

Commentators point out that Apple itself has faced similar accusations from companies like Masimo and A123 Systems over recruiting talent and allegedly absorbing their know-how, underscoring how blurry the line can be between lawful hiring and trade-secret theft.

Now, with OpenAI having hired more than 400 Apple employees and aiming at devices that could rival the iPhone, analysts say the AI lab is defying the old pattern of startups eventually serving Big Tech rather than threatening it directly — a key reason Apple is “fighting so hard.”

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