Apple sues OpenAI over alleged theft of hardware trade secrets

The News

Apple has taken OpenAI to court, alleging that engineers who left Cupertino for the AI company carried its confidential hardware secrets out of the door with them. The complaint, filed on 10 July 2026, describes what Apple calls "a pattern of theft of Apple's trade secrets by OpenAI employees who were formerly at Apple."

Alongside OpenAI, the suit names IO Products, the hardware startup founded by former Apple design chief Jony Ive that OpenAI acquired in 2025. Two individuals are singled out: Tang Tan, now OpenAI's chief hardware officer, and Chang Liu, who moved from Apple to OpenAI in January.

The most detailed accusation targets Liu. Apple claims he reached into its systems after resigning and pulled "dozens of Apple's confidential hardware-related files," spanning unreleased products, engineering presentations, technical specifications and proprietary project data. The filing also alleges Liu coached a former Apple colleague on copying restricted files and evading internal security controls before she too joined OpenAI.

Apple was blunt about its case, saying evidence had emerged that OpenAI staff "wrongfully took Apple's secret and confidential information regarding our unreleased technologies, processes, and products." OpenAI pushed back: "We have no interest in other companies' trade secrets. We remain focused on building innovative technology that empowers people everywhere."

Why It Matters

The dispute lands at a delicate moment. OpenAI has spent the past two years signalling a move beyond software into physical devices, a shift crowned by its purchase of Ive's outfit. Apple, meanwhile, guards its unreleased hardware roadmaps more jealously than almost any company on earth. A lawsuit that puts those ambitions in direct collision is about far more than a handful of downloaded files.

Trade-secret fights between tech giants tend to reset industry norms when they involve marquee names. The Waymo versus Uber battle in 2017, centred on a departing engineer accused of taking self-driving files, ended in a settlement worth roughly 245 million dollars in equity and forced the sector to tighten how it handled staff moving between rivals. This case has the same DNA: a fast-moving upstart, a defensive incumbent, and engineers whose knowledge is the real prize. As every large firm races to assemble AI hardware teams, litigation of this kind doubles as a warning shot to anyone thinking of walking a laptop full of designs across the street.

Indian Angle

For India, the sharpest resonance is the talent market. Apple's supply chain now runs deep through the country, with iPhone assembly scaled up across Tamil Nadu and Karnataka, while global capability centres for Apple, Google and a wave of AI startups have turned Bengaluru and Hyderabad into engineering hubs. Engineers hop between these employers constantly, and a high-profile case built on alleged file theft will push Indian legal and HR teams to revisit exit protocols, device audits and confidentiality clauses.

Here the gap is structural. India still has no dedicated trade-secret statute; protection rests on contract law, confidentiality agreements and common-law principles, which makes enforcement slower and less certain than in the United States. As Indian GCCs graduate from support functions to owning sensitive product work, that ambiguity becomes a live commercial risk. A founder poaching a rival's team in Bengaluru cannot rely on the crisp remedies an American plaintiff can pursue.

FAQ

When was the lawsuit filed?

Apple filed its complaint on 10 July 2026. The case is at an early stage, with no ruling or settlement reported. Trade-secret suits of this scale often take months or years to resolve, and many end in confidential settlements rather than public verdicts.

Who are the individuals named?

Two former Apple employees: Tang Tan, now OpenAI's chief hardware officer, and Chang Liu, who joined OpenAI from Apple in January. Apple's most specific allegations concern Liu, who it says downloaded dozens of confidential hardware files after resigning.

Why is IO Products part of the case?

IO Products is the hardware startup founded by former Apple designer Jony Ive, which OpenAI acquired in 2025. Its inclusion reflects Apple's claim that the alleged theft was tied to OpenAI's push into consumer hardware.

What does this mean for Indian technology firms?

It is a prompt to tighten confidentiality and offboarding, especially at global capability centres handling sensitive product work. Because India lacks a standalone trade-secret law, firms rely on contracts and common-law protections, making internal controls the main defence.

This story was reported by The Verge. Read the full original coverage at The Verge.