Apple sues OpenAI over alleged trade secret theft: What happened and why it matters

Apple has filed a lawsuit against OpenAI, accusing the artificial intelligence company of stealing confidential information and trade secrets related to Apple's hardware technologies. The legal battle marks a dramatic breakdown in the relationship between the two companies, which partnered just two years ago to bring ChatGPT to iPhones.

Why has Apple sued OpenAI?

Apple has sued OpenAI in the US District Court for the Northern District of California, alleging that the AI company systematically obtained Apple's confidential information to accelerate the development of its own AI-powered hardware devices.

In its court filing, Apple claimed that OpenAI's actions involved current and former Apple employees, senior executives and business partners.

The iPhone maker alleged that "at every level" OpenAI was involved in acquiring Apple's trade secrets, describing it as a coordinated effort rather than isolated incidents.

Apple is seeking financial damages, court orders preventing OpenAI from using the alleged trade secrets and injunctions to stop any further misuse of its confidential information.

What are Apple's main allegations?

The lawsuit centres on several allegations involving former Apple employees who either joined OpenAI or interviewed with the company.

Apple has named OpenAI's Chief Hardware Officer Tang Tan—a former Apple vice-president—as one of the defendants. According to Apple, Tan instructed Apple employees interviewing for jobs at OpenAI to bring actual Apple hardware components to interviews for "show-and-tell" sessions, allowing OpenAI engineers to access confidential product information.

Apple also alleged that departing employees were coached on how to avoid the company's security protocols while leaving.

Another defendant, former Apple engineer Chang Liu, is accused of stealing an Apple laptop before joining OpenAI.

The lawsuit further claims that OpenAI asked manufacturing partners to use a proprietary metal-finishing process developed by Apple while allegedly giving the impression that it had Apple's approval.

How did the relationship between Apple and OpenAI change?

The lawsuit represents a remarkable turnaround.

In 2024, Apple announced a high-profile partnership with OpenAI under which ChatGPT was integrated into Apple Intelligence across iPhones, iPads and Macs. OpenAI CEO Sam Altman even appeared alongside Apple executives during the announcement.

However, the relationship reportedly cooled after OpenAI entered the AI hardware race by acquiring former Apple design chief Jony Ive's startup, IO Products, for $6.4 billion in 2025.

Apple has since shifted its AI strategy. The latest version of Siri, expected later this year, uses Google's Gemini AI models instead of OpenAI's technology.

What has OpenAI said?

OpenAI has denied Apple's allegations.

"We have no interest in other companies' trade secrets. We remain focused on building innovative technology that empowers people everywhere," the company said in a statement.

IO Products, which is also named in the lawsuit, has not separately commented on the allegations.

Why is the lawsuit significant?

The case could become one of the biggest legal disputes in the AI industry because it combines intellectual property, employee mobility and competition in AI hardware.

The lawsuit also comes at a crucial time for OpenAI, which is widely expected to prepare for a landmark initial public offering (IPO). Any prolonged legal battle could increase regulatory scrutiny and create uncertainty around its hardware ambitions.

For Apple, the case signals that protecting proprietary hardware designs and manufacturing processes remains a strategic priority as AI companies increasingly compete to build next-generation consumer devices.

What happens next?

The federal court will now examine Apple's allegations and OpenAI's response. Apple is seeking damages, injunctions and court orders preventing OpenAI from using any allegedly misappropriated trade secrets.

For now, there is no indication that Apple's existing ChatGPT integration will immediately end. However, the lawsuit underscores how quickly partnerships in the fast-moving AI industry can evolve into fierce legal battles as companies race to dominate the next generation of AI-powered hardware.