Apple filed a lawsuit on Friday in a federal court in San Jose, California, against OpenAI, its hardware subsidiary io Products, and two former Apple employees, alleging a systematic effort to misappropriate trade secrets to build a competing consumer device. The complaint names Tang Yew Tan, now OpenAI’s chief hardware officer and a 24-year veteran of Apple’s product design team, and Chang Liu, a former electrical engineer, as key conduits for the alleged theft.

According to the court filing, Apple asserts that OpenAI engaged in a “coordinated pattern of misconduct at an institutional level,” with Tan using confidential project code names during job interviews and instructing Apple employees to bring physical components such as batteries and circuit boards for “show and tell” sessions. Liu is accused of downloading dozens of confidential hardware files after his departure and exploiting a network vulnerability to access further data. Apple says it raised its concerns with OpenAI in February but received no response. A spokesman for OpenAI told the BBC that the company has “no interest in other companies’ trade secrets” and is reviewing the complaint.

The legal action injects uncertainty into OpenAI’s preparations for a hotly anticipated initial public offering, with the company valued at roughly $852 billion and its expansion into consumer hardware seen as a critical growth vector. The dispute also marks a sharp deterioration in a relationship that saw Apple integrate ChatGPT into its devices in 2024. Tensions had already surfaced: Bloomberg reported in May that OpenAI was itself considering litigation against Apple, alleging the iPhone maker had failed to adequately promote the integration. Apple has since shifted some artificial intelligence features to Google’s Gemini platform.

Viewed from Silicon Valley, the case underscores the fierce competition to define the next generation of AI-powered hardware, a race that has drawn in former Apple design chief Jony Ive, whose startup io Products was acquired by OpenAI for $6.5 billion in 2025. The lawsuit claims that more than 400 former Apple employees now work at OpenAI and that the company coached departing staff on how to avoid detection. Apple is seeking an injunction to prohibit OpenAI from using any confidential information and to destroy proprietary materials, along with unspecified monetary damages. The case, which requests a jury trial, is expected to move into the discovery phase in the coming months.