Apple sues OpenAI in a California federal court over allegations of trade secret theft. The lawsuit, filed in the U.S. District Court for the Northern District of California, accuses the ChatGPT developer of using confidential information to build its own consumer hardware. According to a report by Okaz, the dispute centers on former employees who allegedly leaked proprietary data.
The legal action, where Apple sues OpenAI, claims that the ChatGPT developer executed a systematic plan to recruit former staff. Specifically, these employees allegedly shared supplier relationships and internal designs to accelerate the development of competing devices. Consequently, this hardware could directly challenge the market position of the iPhone in the future.
Details of the Lawsuit
Apple stated that more than 400 of its former employees currently work at the artificial intelligence firm. Furthermore, the company asserted that it sent a letter in February expressing concerns about data transfers but received no response. Meanwhile, OpenAI denied the allegations in a brief statement, saying it has no interest in other companies’ trade secrets.
Allegations Against Former Employees
The lawsuit names two former senior employees, Chang Liu and Tan Yu Tan, as key figures in the data transfer. Notably, Liu is a former senior hardware systems engineer, while Tan served as vice president of iPhone and Apple Watch product design. Apple claims that Liu downloaded dozens of confidential files after exploiting a verification loophole on the internal network.
In addition, the company accuses Tan of emailing confidential supplier information to himself before his departure. He also allegedly encouraged employees to bring physical components to job interviews in “Show and Tell” sessions. As a result, one applicant reportedly stated they did not know such parts could be taken from the office.
Apple Sues OpenAI Over Hardware Secrets
Legal experts suggest that this case could become one of the largest trade secret disputes in the technology sector. Specifically, Stanford law professor Mark Lemley noted that while hiring from competitors is legal, using stolen documents creates severe legal risks. Moreover, Rutgers law professor Camilla Hrdy pointed out that most AI disputes involve software rather than physical smart devices.
Shifting from Partners to Competitors
This legal dispute marks a significant shift in relations since Apple sues OpenAI despite their existing partnership. Previously, the companies collaborated to integrate ChatGPT with Siri as part of the Apple Intelligence rollout. However, tensions rose after OpenAI acquired io Products, a firm founded by former Apple designer Jony Ive, for 6.5 billion dollars.
Ultimately, analysts believe OpenAI is developing a smartphone that operates independently of traditional operating systems. This move could impact the global economy and the mobile market. Meanwhile, the lawsuit may delay OpenAI’s hardware plans and strain the remaining technical partnership between the two companies.
