Apple is suing OpenAI for alleged trade secret theft, accusing the company and two staffers of stealing the iPhone maker’s confidential information to help build its own hardware.
“As a natural result, OpenAI’s nascent hardware business now rests on the shakiest of foundations, rotten to its core by its illegal reliance on misappropriated trade secrets,” Apple claimed in the lawsuit, which was first reported by The Wall Street Journal.
As PCMag‘s Michael Kan reports, Apple filed the lawsuit in a US district court, naming the former employees as well as io Products, a startup from former Apple design chief Jony Ive. Last year, OpenAI acquired io, which has been developing a mysterious AI-powered device for Sam Altman’s company.
Apple Accuses OpenAI of Conspiring to Steal Trade Secrets
However, Apple claims it has uncovered evidence that OpenAI has been conspiring to steal its trade secrets by poaching employees or pressuring them to divulge their work during job interviews. “Unsurprisingly, Apple’s investigation has found a pattern by employees who depart for OpenAI of taking steps to evade the security processes intended to protect Apple’s confidential information,” the company says.
In the 41-page complaint, the company names former Apple VP of Product Design Tang Yew Tan and ex-iPhone electrical engineer Chang Liu as two major culprits, who’ve both joined OpenAI. Tan, now OpenAI’s Chief Hardware Officer, has been interviewing Apple employees interested in jumping ship to the company asking them to discuss unannounced products or even to bring actual hardware to interviews.
Meanwhile, Liu at one point hacked Apple’s shared network folders using a software bug. “He celebrated his improper access, exclaiming in a message left on his colleague’s Apple-issued work laptop ‘LOL’ and that it was ‘so funny,’” the complaint says. “Then, over several weeks, while developing hardware for OpenAI, Mr. Liu surreptitiously accessed and downloaded dozens of Apple’s confidential hardware-related files, including voluminous, detailed information about unreleased products, engineering presentations, technical specifications, and proprietary project data.”
“This is the Tip of the Iceberg”
OpenAI has allegedly been trying to piggyback on Apple’s supply chain by working with its trusted partners behind the company’s back. “This is the tip of the iceberg. Apple lacks visibility into what’s been happening behind closed doors at OpenAI, where such misconduct is normalized and exemplified by leadership,” the lawsuit adds. “Apple’s investigation has uncovered misconduct reaching across seniority levels, technical disciplines, and departments at OpenAI.”
Apple suggests, however, that OpenAI is “under mounting pressure to deliver its first commercial hardware product and facing the reality that building a successful consumer device business from scratch is more complex, time-consuming, and difficult than it anticipated, [so] OpenAI has resorted to taking unlawful shortcuts.”
OpenAI is still reviewing the complaint, but told PCMag: “We have no interest in other companies’ trade secrets. We remain focused on building innovative technology that empowers people everywhere.”
A Major Breakdown in the Relationship
In the meantime, the lawsuit suggests a major breakdown in the relationship between the two companies after OpenAI partnered with Apple in 2024 to integrate ChatGPT with Apple Intelligence. Apple has since decided to offer an upgraded Siri AI later this year based on Google’s Gemini models.
If Apple’s lawsuit proceeds, the controversy could blow up even further. “This lawsuit and the discovery process are needed to expose and begin to remedy the pervasive theft of Apple’s trade secrets,” the complaint noted.
“Apple’s lawsuit is demanding the court block OpenAI from using the trade secrets and erasing evidence of the illegal acts, force them to return “all of Apple’s property in their possession,” and pay up in damages and royalty fees.”
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