Apple just fired a legal torpedo straight into OpenAI’s secretive hardware operation.
In a federal lawsuit filed Friday, the iPhone maker accused OpenAI, two former Apple employees and the company behind OpenAI’s coming consumer devices of participating in a coordinated campaign to steal some of the most valuable trade secrets in American technology.
Apple’s language is extraordinary. The company alleges that OpenAI’s hardware business is built on a foundation that is “rotten to its core.”
The first alert captured just how direct the accusation is: Apple says the alleged campaign was designed to help OpenAI build its upcoming line of AI devices.
BREAKING: Apple is suing OpenAI, accusing it and its hardware chief of a coordinating trade secret theft campaign to help build its upcoming suite of AI devices.
— Mark Gurman (@markgurman) July 10, 2026
Apple is alleging far more than a stray file or one employee’s memory. The claimed system reached from engineers to OpenAI’s chief hardware officer, with confidential product information allegedly moving out the door along the way.
Apple’s 41-page federal complaint names former Apple engineers Chang Liu and Tang Yew Tan, along with OpenAI Foundation, OpenAI Group PBC and io Products. It was filed in the U.S. District Court for the Northern District of California and demands a jury trial.
Apple says Liu left the company in January after eight years as a senior system electrical engineer. According to the filing, he failed to return an Apple-issued laptop, later used another Apple computer without authorization and exploited a previously unknown authentication flaw to reach shared network folders.
The suit alleges that Liu downloaded dozens of confidential hardware files while building products for OpenAI. Apple says the material included unreleased-device information, technical specifications, engineering presentations and proprietary project data, while a message cited in the filing allegedly celebrated the access with “LOL” and called it “so funny.”
Tan spent 24 years at Apple and rose to vice president of product design for the iPhone and Apple Watch before becoming OpenAI’s chief hardware officer. Apple alleges he used an internal project codename while questioning recruits, asked candidates to bring actual Apple parts to interviews and sought design artifacts, prototypes, manufacturing details and supplier information.
If Apple proves even a substantial part of that case, this goes far beyond ordinary corporate poaching. It would mean a rival tried to shortcut years of engineering and manufacturing work by turning Apple’s own people and internal systems into an extraction pipeline.
One allegation in particular is almost impossible to believe: the lawsuit says unauthorized access to Apple’s network was treated like a joke.
BREAKING: Apple accuses an OpenAI employee of hacking its systems, downloading unreleased product files, & celebrating the breach as “so funny.”
— Polymarket (@Polymarket) July 10, 2026
The alleged recruiting tactics are just as explosive. Apple says OpenAI interviewers requested confidential work samples and that new hires received an internal Apple document marked “Need to Know” that explained the company’s departure-security procedures.
In plain English, Apple is accusing the operation of learning how its defenses worked and then helping departing employees navigate around them.
Axios reports that OpenAI flatly denies wanting anyone else’s trade secrets and says it remains focused on building technology that empowers people. OpenAI had not yet filed a court response to Apple’s complaint as of Friday night.
The same report says more than 400 former Apple employees now work at OpenAI. The enormous flow of talent between the companies helps explain why Apple is treating the alleged pattern as an institutional threat rather than one isolated personnel dispute, even though employment at OpenAI alone proves nothing improper.
Former Apple design chief Jony Ive, who now leads OpenAI’s device work, is not named as a defendant. His company io Products is named alongside OpenAI’s corporate entities, Tan and Liu, and Apple says the alleged activity extended into supplier relationships and included use of a proprietary metal-finishing technique.
Apple and OpenAI are already business partners through ChatGPT’s integration into Apple products, but the complaint says that agreement is not at issue here. Friday’s filing is still an extraordinary rupture, because Apple is suing a partner that could soon become a formidable hardware rival.
The lawsuit is already reverberating across Silicon Valley, where OpenAI’s still-unannounced device has been one of the industry’s most closely guarded projects.
The broader shock wave was captured here:
Apple sues OpenAI for trade theft, sending shock waves through Silicon Valley https://t.co/jf4SghS3o5 pic.twitter.com/HQf4itnzib
— New York Post (@nypost) July 10, 2026
The New York Post reports that Apple is targeting alleged theft involving product designs, manufacturing processes and supply-chain strategies. Those are precisely the hard-won advantages that allow Apple to move a device from a secret laboratory to millions of consumers around the world.
OpenAI entered the consumer-hardware race through its acquisition of io Products, the company co-founded by Ive, Tan and other former Apple leaders. The deal was valued at roughly $6.5 billion, a staggering bet that OpenAI can create a new physical gateway to artificial intelligence instead of relying on phones and computers made by other companies.
Apple told the Post that evidence had emerged suggesting OpenAI employees wrongfully took secret information involving unreleased technology, processes and products. The company said it would defend its teams’ work and innovation and was taking what it considers appropriate action.
OpenAI has not revealed exactly what its consumer device will be, and that mystery now hangs over the lawsuit. Every allegation about parts, prototypes, suppliers and manufacturing knowledge raises the question of how much disputed Apple information may have touched a product that has not even reached the public.
Apple is asking the court to stop the defendants from possessing, using or disclosing its trade secrets. It also wants evidence preserved, Apple property returned and access to its confidential systems cut off.
The company is seeking actual damages, unjust-enrichment damages, a reasonable royalty, exemplary damages, attorneys’ fees and other relief. No dollar figure is stated in the complaint.
These remain allegations, and the defendants will have the opportunity to answer them in court. Apple did not file a cautious warning shot; it filed a sprawling accusation that OpenAI’s hardware push was tainted from the inside.
Now the most anticipated new device in artificial intelligence may have to survive a courtroom before it ever survives the marketplace.
This is a Guest Post from our friends over at WLTReport. View the original article here.
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