OpenAI’s Hardware Business Called ‘Rotten’ in Apple Lawsuit

Apple has initiated legal action against OpenAI and two former Apple employees now working for the AI company, alleging theft of proprietary trade secrets. This lawsuit, filed in federal court on Friday, outlines serious allegations of misconduct against OpenAI, characterizing its hardware division as fundamentally flawed.

Included in the lawsuit is io Products, the hardware startup led by Jony Ive that OpenAI acquired last year. While the lawsuit does not mention Ive specifically, it describes the organization as involved in “a coordinated pattern of misconduct on an institutional level” at OpenAI.

The legal filing identifies Chang Liu, a former senior system electrical engineer at Apple, and Tang Yew Tan, a former Apple VP who currently serves as OpenAI’s Chief Hardware Officer. Apple accuses both Liu and Tan of sharing sensitive trade secrets with OpenAI. According to Apple’s legal team, Liu “secretively accessed and downloaded numerous confidential hardware-related files from Apple, which included extensive, detailed insights into unreleased products, engineering presentations, technical specifications, and proprietary project data.”

Apple further alleges that Tan “has instructed job candidates still employed at Apple to bring ‘actual parts’ from Apple to their interviews for ‘show and tell’ sessions,” during which he and his team at OpenAI could extract even more confidential information from Apple. Overall, Apple maintains that over 400 of its former employees are now working at OpenAI, and it claims that the interview process is designed “to solicit additional confidential Apple information.”

OpenAI has not yet responded to requests for comments regarding these allegations. The lawsuit states that the company “never responded” to Apple’s outreach concerning its concerns. In response to the lawsuit, Drew Pusateri, OpenAI’s director of strategic communications, tweeted that the company has “no interest in other companies’ trade secrets.”

Our statement in response to this suit: We have no interest in other companies’ trade secrets. We remain focused on building innovative technology that empowers people everywhere. https://t.co/lIxGW6hyz5

— Drew Pusateri (@drewpusateri) July 10, 2026

In its filing, Apple expresses concerns that it may not be fully aware of the extent of OpenAI’s misconduct. “What is evident, however, is this: at every level, from its Technical Staff to its Chief Hardware Officer, and in collaboration with business partners, OpenAI has been misappropriating Apple’s trade secrets and confidential information,” the filing states. “As a direct outcome, OpenAI’s emerging hardware business is built on a precarious foundation, fundamentally compromised by its unlawful reliance on stolen trade secrets.”

This lawsuit emerges during a period when Apple continues to collaborate with OpenAI on Apple Intelligence. In a footnote, Apple clarifies that its existing agreement, which enables the integration of ChatGPT into its devices, “is not under scrutiny here” and that the allegations of trade secret theft “are unrelated” to this partnership.

Update, July 10, 7:30PM ET: This article has been updated post-publication to include a public comment from Drew Pusateri, OpenAI’s director of strategic communication.