Apple filed a federal lawsuit on July 10 against OpenAI, io Products, and two former employees, accusing the artificial intelligence company of misappropriating hardware trade secrets to accelerate its entry into consumer devices. The complaint, filed in the U.S. District Court for the Northern District of California, names OpenAI hardware chief Tang Tan and engineer Chang Liu as defendants alongside OpenAI entities and io Products, the hardware startup OpenAI acquired from Jony Ive's team in 2025.
The case marks a sharp break from the partnership Apple and OpenAI announced in 2024 to integrate ChatGPT into iPhones and Macs. Apple now alleges a coordinated effort to recruit its staff, extract confidential manufacturing and design information, and use that material to support OpenAI's forthcoming hardware lineup, which analysts expect as early as 2027.
What Apple Alleges
According to the 41-page complaint reviewed by Credence Wire, Apple says Liu left the company in January 2026 and failed to complete standard offboarding steps, including returning a work laptop and attending an exit interview. Apple claims Liu retained access to a former colleague's workstation after departure and that Tan, who previously led iPhone and Apple Watch design, directed job candidates to share supplier data, CAD files, and prototype details during OpenAI interviews.
Apple describes the conduct as trade secret misappropriation and breach of contract. The filing asks for damages, injunctive relief, and an order barring OpenAI from using allegedly stolen information. Representatives for OpenAI told CNBC and the BBC that the company will defend itself against the claims.
Parties and Stakes
Defendants include OpenAI Foundation, OpenAI Group PBC, io Products, Tan, and Liu. Jony Ive is not named as a defendant. Apple is represented by Weil, Gotshal & Manges. The suit arrives two months after a federal jury rejected Elon Musk's claims that OpenAI abandoned its nonprofit mission, a verdict OpenAI framed as validation of its corporate structure ahead of a widely expected initial public offering.
Legal experts said Apple's timing could affect investor diligence on OpenAI's hardware strategy. If a court grants early discovery, suppliers, prototype timelines, and hiring practices at io Products would face scrutiny just as OpenAI negotiates banking mandates for a listing that bankers have discussed at valuations approaching $1 trillion.
Industry Impact
Hardware remains a strategic gap for OpenAI relative to Apple, Google, and Meta, each of which ships billions of devices with on-device AI pipelines. OpenAI has previewed a voice-first device developed with Ive's studio but has not disclosed manufacturing partners or shipment dates. Apple's complaint argues that OpenAI's hardware business "rests on the shakiest of foundations" without access to Apple's supply chain know-how.
For enterprise customers, the dispute raises questions about how deeply Apple will continue promoting OpenAI models on its platforms if litigation escalates. Bloomberg reported in May that OpenAI had considered its own legal action against Apple over integration terms, suggesting tensions predated the July filing.
What Comes Next
OpenAI typically has 21 days to respond to the complaint under federal rules. Apple may seek a preliminary injunction limiting use of disputed materials while discovery proceeds. Credence Wire will update this story as court filings, company statements, and regulatory disclosures are released.
