Apple Sues OpenAI Over Alleged Hardware Trade Secret Theft

The News

Apple has taken OpenAI to court, accusing the ChatGPT maker of orchestrating the theft of confidential hardware designs as it races to build its own consumer device. The complaint, lodged on Friday, 10 July 2026 in the U.S. District Court for the Northern District of California, alleges trade secret theft and breach of contract.

At the centre of the dispute are two former Apple staffers now working for OpenAI. Tang Tan, OpenAI's Chief Hardware Officer, spent 24 years at Apple as a vice president of product design for the iPhone and Apple Watch. Apple claims he used its confidential project code names while recruiting, asked candidates to bring Apple hardware components to interviews, and coached departing employees on how to sidestep security procedures.

The second individual, Chang Liu, worked at Apple for 8 years as a senior systems electrical engineer before joining OpenAI in 2026. Apple alleges he never returned a company-issued laptop and used it to download confidential technical documents.

The filing lists a broad sweep of allegedly misappropriated material: technical specifications, engineering presentations, proprietary project data, unannounced technologies, component and vendor selection processes, and a proprietary metal finishing technique. Apple wants the court to bar OpenAI from using its secrets, order the return of materials, and preserve evidence. Jony Ive, whose design startup io was bought by OpenAI for $6.5 billion last year, is named in the filing but is not accused of any wrongdoing.

Why It Matters

This is a rare instance of Apple, famously secretive and litigation-shy about its unreleased products, publicly airing details of a project it has never confirmed. The subtext is competitive dread. OpenAI is widely reported to be building its first piece of hardware, possibly an AI-native smartphone, that would go head to head with the iPhone, Apple's profit engine.

The suit echoes earlier Silicon Valley talent-and-secrets battles, most notably Waymo's 2017 case against Uber over self-driving files carried out of Google by an engineer, which ended in a $245 million settlement. When a company sues over people rather than patents, it is usually because the crown jewels walk out on a laptop, not in a filing cabinet. Apple says it wrote to OpenAI in February to raise concerns and received no reply, a silence it now casts as evidence of intent.

Indian Angle

For India's vast engineering workforce, the case lands on a fault line the country has been arguing over for years. Apple and OpenAI both draw heavily on Indian talent, and Apple's manufacturing footprint here, through Foxconn and the Tata group, keeps expanding under the government's production-linked incentive push. A hardware cold war between the two firms will ripple through Indian assembly lines and design teams alike.

The legal lesson is sharper still. India has no dedicated trade secrets statute; protection rests on contract law and common-law confidentiality. More awkwardly, Section 27 of the Indian Contract Act renders most non-compete clauses void, so an Indian employer trying to run Apple's playbook would find far weaker footing. That gap has already surfaced in the moonlighting rows at Wipro and Infosys, and it is why Indian IT majors lean on garden leave, tight NDAs and rapid device recovery rather than courtroom threats.

For Indian founders and general counsel, the takeaway is practical: offboarding discipline, laptop recovery and clean-room hiring matter more than restrictive covenants that Indian courts will not enforce.

FAQ

Where was the case filed?

Apple filed in the U.S. District Court for the Northern District of California on Friday, 10 July 2026, alleging trade secret theft and breach of contract by OpenAI.

Who are the former Apple employees named?

Tang Tan, now OpenAI's Chief Hardware Officer after 24 years at Apple, and Chang Liu, a senior systems electrical engineer who spent 8 years at Apple before joining OpenAI in 2026.

Is Jony Ive accused of anything?

No. Ive is named because his startup io was acquired by OpenAI for $6.5 billion last year, but the filing does not accuse him of wrongdoing.

What does this mean for Indian tech workers?

India's weak non-compete enforcement under Section 27 shifts the burden to strong NDAs, garden leave and disciplined offboarding rather than litigation-led restraint.

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