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Apple on Friday accused OpenAI of stealing trade secrets as it sought to build its own ChatGPT hardware, a major break in the relationship between the iPhone maker and the intelligence firm.
Apple said in a lawsuit filed in California federal court that the theft of its trade secrets was part of a “coordinated pattern of misconduct at the institutional level” by OpenAI.
“This case is about former Apple employees who stole Apple’s trade secrets for the benefit of OpenAI,” the filing said. “Apple is bringing this suit to stop it.”
Two former Apple employees who now work for OpenAI have also been named as defendants. Another is Tang Tan, who helped design the iPhone, Apple Watch and iPod and is now OpenAI’s chief hardware officer. One is Chang Liu, a former electronics engineer Apple says he entrusted with some of the most critical product development efforts before Liu left Apple to join OpenAI earlier this year.
OpenAI said it was still reviewing the filing, but spokesman Drew Pusateri said in a statement Friday that OpenAI “doesn’t care about other companies’ trade secrets. We remain focused on building new technologies that empower people everywhere.”
Canadian privacy regulators have ruled that OpenAI did not comply with Canadian privacy laws when training its popular AI tool ChatGPT. Although investigators say the company has fixed the issues, OpenAI has never faced fines for its privacy violations. Federal Privacy Commissioner Philippe Dufresne joins Power and Politics for the discussion.
OpenAI never said exactly what kind of device it’s building, but it described it as an effort to find a new way to interact with AI that goes beyond “traditional products and interfaces.” It’s part of a broader plan to create a virtual reality display of the latest AI advances, a decade after Amazon and Google introduced screen-free speakers into homes.
The lawsuit alleges that the effort was created in part with information stolen from Apple.
“OpenAI’s fledgling hardware business is now on a shaky footing, which has been severely damaged by its illegal reliance on unlicensed trade secrets,” the lawsuit said.
Apple says a ‘pattern of theft’ is being uncovered
Apple said it began investigating whether some of its confidential information was compromised and “revealed a pattern of theft” of Apple’s trade secrets by former employees who moved on to positions at OpenAI.
The lawsuit alleges that Liu and Tan accessed Apple’s confidential company information and files while working at OpenAI. Among the allegations, Apple claims that Liu found and downloaded several confidential files related to hardware on an Apple-issued device that he kept after he left. It also claims that Tan directed job seekers who were still working for Apple to bring “Real Parts” from Apple to their interviews at OpenAI.
Apple said in the lawsuit that it reached out to OpenAI in February to express its concerns at the start of its investigation, but said that OpenAI did not respond.
An Apple spokesperson said in a statement on Friday that the company “will always protect our teams’ hard work and innovation, and we are taking all appropriate steps to do so.”
A partnership that turns into a rivalry
Apple sought help from OpenAI a few years ago as it was lagging behind in the AI race caused by the arrival of ChatGPT. The two companies partnered in 2024 to use ChatGPT as an AI-powered “answer engine” on the iPhone when the built-in Siri technology can’t satisfy users’ needs. Recently, the partnership has turned into a rivalry.
As part of its expansion efforts, OpenAI hired former Apple designer Jony Ive to oversee a project to build an AI-powered device that many analysts believe could eventually challenge Apple’s products.
Last year, OpenAI announced that it was working on a secret hardware partnership with Ive to pioneer a new way to communicate with artificial intelligence. As part of the partnership, OpenAI acquired io Products, a product and engineering company co-founded by Ive, Tan and two others, in a deal valued at approximately $6.5 billion.
That led little-known tech iyO Inc. sued Ive and OpenAI CEO Sam Altman for trademark infringement over a name that sounded similar to the firms’ previous collaborations. The agency also sued one of its former employees for allegedly leaking a secret sketch of an unreleased iyO product, and later added privacy theft claims against Tan to the suit.
Apple’s lawsuit also names io Products as a defendant. Lawyers who previously represented the company and Tan did not immediately respond to requests for comment.
Apple’s lawsuit comes as OpenAI has been weighing whether to go public on Wall Street and faces stiff competition from rivals, including Anthropic and Google.
OpenAI won some of its businesses earlier this year to focus on its core product, ChatGPT, but has continued to pursue a particular machine, the company’s chief financial officer told The Associated Press this spring.
“We have consumer devices coming later this year,” CFO Sarah Friar said in April.
