Apple Sues OpenAI Over Alleged Apple Watch, iPhone Trade Secret Theft
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- Apple filed a 41-page complaint in Northern California federal court accusing OpenAI of systematically recruiting former Apple employees to steal hardware trade secrets, naming ex-Apple Watch VP Tang Tan (24 years at Apple, now OpenAI's chief hardware officer), ex-iPhone systems engineer Chang Liu (8 years at Apple), and a third former employee, Yu-Ting "Alyssa" Peng.
- The complaint alleges Tan asked job candidates to bring Apple hardware outside the office for "show and tell" during OpenAI interviews and coached Apple staff on circumventing offboarding security, though it remains unclear which secrets may have reached OpenAI's unreleased device.
- The suit lands as OpenAI has confidentially filed an S-1 with the SEC to go public and is preparing to launch a hardware device in 2027, roughly two years after paying nearly $6.5 billion for Jony Ive's hardware startup io.
- Avery Williams, cochair of McKool Smith's trade secret practice, said OpenAI "is not going to be out of the woods" until courts resolve the AI training fair-use question — a "trillion-dollar question" — and called being sued by Apple mid-IPO "never fantastic" given Apple's reputation as a "tenacious litigant."
- Apple told the court the named individuals were "the tip of the iceberg," alleging theft occurred "at every level" from technical staff to the chief hardware officer and in coordination with business partners.
- Experts told The Verge the underlying allegations are routine in Silicon Valley, but DTEX's Michael Barnhart said Apple's "layered approach" — combining hiring-stage extraction, interview solicitation, and internal collusion — was unusually comprehensive in a single filing.
- The case marks a break from Apple and OpenAI's 2024 partnership to integrate ChatGPT into Apple devices, with Rikka Law Group's Charlyn Ho saying industry alliances are fracturing as AI competition intensifies.
Why it matters: OpenAI is now fighting a multi-front legal war as it heads toward the public markets and a 2027 hardware launch — with a tenacious Apple litigant alleging it raided Cupertino's hardware talent to jumpstart the device work meant to anchor its post-software future, on top of pending Musk, NYT, and Rane-family suits.
