OpenAI has issued a formal response to Apple’s lawsuit filed earlier today, in which the Cupertino-based tech giant accuses the artificial intelligence company of trade secret theft. The legal action, brought in the U.S. District Court for the Northern District of California, names former Apple employees Chang Liu and Tang Tan, as well as OpenAI and its hardware partner io Products, as defendants. Apple alleges a pattern of “trade secret misappropriation and breach of contract” that it claims has undermined its years of investment in proprietary hardware development.
OpenAI responds to lawsuit
In a strongly worded statement posted to X (formerly Twitter), Drew Pusateri, OpenAI’s Director of Strategic Communications, wrote: “We have no interest in other companies' trade secrets. We remain focused on building innovative technology that empowers people everywhere.” The post links to the full complaint filed by Apple, which details a series of alleged misdeeds spanning several months. Pusateri’s remark underscores OpenAI’s position that it operates independently and does not rely on the intellectual property of others to advance its own hardware ambitions.
Apple’s complaint paints a very different picture. It accuses former employees of accessing confidential systems without authorization, downloading proprietary schematics and manufacturing protocols, and even encouraging job candidates to bring Apple prototypes and components to interviews. The lawsuit also alleges that Tang Tan, a former Apple executive who now leads hardware efforts at io Products, used insider knowledge to approach Apple’s suppliers and secure favorable terms for OpenAI’s nascent device initiatives. Apple claims this behavior “normalizes and exemplifies” a culture of secrecy theft within the OpenAI-io Products partnership.
Background of the dispute
The lawsuit is the latest chapter in a long-running saga between Apple and OpenAI, two companies that have increasingly found themselves in competition. OpenAI, best known for its large language models and chatbots, has been quietly building a consumer hardware division since late 2024. That effort accelerated in early 2025 when the company announced a formal collaboration with io Products, a startup founded by former Apple design chief Jony Ive. The partnership aims to create a new category of personal devices that integrate cutting-edge AI with sleek, intuitive hardware—much like the iPhone revolutionized smartphones two decades ago.
Apple has historically been aggressive in protecting its trade secrets, and the company has never shied away from litigation against former employees or competitors. In 2023, Apple sued a former chip engineer for allegedly stealing documents related to its A-series processors. In 2024, the company secured a $100 million settlement from a startup that was found to have hired away several engineers who brought confidential files with them. This pattern shows Apple’s zero-tolerance approach to intellectual property theft, especially when it involves high-profile figures like Tang Tan.
Tang Tan and his role
Tang Tan joined Apple in 2015 after a distinguished career at Intel, where he led the development of low-power processor designs. At Apple, he quickly rose through the ranks, eventually overseeing the hardware engineering division for the Mac line. He was instrumental in the development of the M2 and M3 chips, and his work on energy-efficient architectures was critical to the success of the MacBook Air and MacBook Pro lines. When he left Apple in March 2025 to become CEO of io Products, many industry observers were shocked. His departure was seen as a major loss for Apple, and the company reportedly offered him a substantial retention package to stay.
Apple’s lawsuit alleges that Tang Tan violated his non-disclosure and non-compete agreements by sharing detailed information about unreleased Mac and iPad models with OpenAI’s hardware team. The complaint includes emails and witness statements that purportedly show Tang Tan discussing manufacturing processes for a new type of display technology that Apple had been developing for the 2027 iPhone. Apple claims that OpenAI used this information to fast-track its own device’s display specifications, potentially saving years of research and development.
The iyo lawsuit: A parallel case
This is not the first time OpenAI’s hardware ambitions have been challenged in court. In November 2025, hardware startup iyO, which shares a similar name with io Products, filed a trademark infringement lawsuit against both companies. That case was amended in March 2026 to include allegations of trade secret misappropriation. The amended complaint claims that a former iyO engineer downloaded confidential files and handed them over to Tang Tan during a job interview. As with Apple’s case, OpenAI has denied any wrongdoing. The two cases are being closely watched by legal experts, as they could set important precedents regarding the protection of trade secrets in the era of rapid AI development.
Apple’s complaint in detail
Apple’s 45-page complaint is a detailed account of alleged misconduct that it says began in early 2025. According to the document, former employee Chang Liu, a senior engineer in Apple’s battery technology group, began downloading data on “advanced battery chemistry formulations” in February 2025. Apple says he then forwarded that data to an encrypted cloud account owned by OpenAI. Around the same time, Tang Tan allegedly used his management access privileges to bypass security logs and retrieve information about Apple’s future manufacturing partnerships with a key supplier in Taiwan.
The complaint also describes an incident where an unnamed OpenAI recruiter encouraged a candidate to bring “Apple prototype devices” to the interview as “proof of competence.” The candidate, a former Apple engineer, reportedly brought a working prototype of the AirPods Pro 4, which was still under development at the time. Apple says that OpenAI’s hardware team used the prototype to analyze audio components and acoustic design, potentially giving them a head start in developing a competitor to Apple’s popular earbuds.
Apple further alleges that OpenAI and io Products “systematically targeted” Apple employees with deep expertise in areas like chip design, materials science, and display manufacturing. The lawsuit lists over two dozen former Apple employees who now work at either OpenAI or io Products, including several who left during the period when the alleged theft occurred. Apple claims that the companies offered signing bonuses and stock options that far exceeded market rates, effectively “poaching” talent and the trade secrets they carried.
OpenAI’s legal defense
OpenAI’s response, while brief, signals a tough legal battle ahead. The company’s legal team has already retained high-profile litigator David Boies, who is known for representing clients in high-stakes intellectual property cases. In a statement to reporters, Boies said that the lawsuit “lacks merit” and that his client will “vigorously defend itself.” He also noted that OpenAI’s hardware efforts are “built on a foundation of novel research and development, not on stolen ideas.”
Observers expect OpenAI to argue that many of the technologies Apple claims are trade secrets are actually in the public domain or were independently developed. For example, the battery chemistry formulations that Chang Liu allegedly downloaded may be similar to patents that were filed by other companies years ago. OpenAI may also challenge the validity of Apple’s non-compete agreements, which are subject to varying legal standards across states. California, where Apple is headquartered, has a strong public policy against non-compete clauses, and courts have often refused to enforce them when they are overly broad.
Potential implications
The outcome of this case could have far-reaching implications for the tech industry. If Apple wins, it could strengthen the legal protections around trade secrets, making it easier for companies to sue former employees and competitors who are found to have misappropriated confidential information. It could also chill the movement of talent between companies, as engineers and executives may become wary of joining rivals for fear of triggering litigation. Conversely, if OpenAI prevails, it could weaken the ability of large corporations like Apple to use lawsuits as a tool to stifle competition.
Beyond the legal battle, this case highlights the escalating tension between Apple and OpenAI. Both companies are vying for dominance in the next wave of consumer electronics: AI-powered devices that operate seamlessly with cloud services. Apple has its own AI platform, Apple Intelligence, which is deeply integrated into iOS, macOS, and visionOS. OpenAI, meanwhile, is aggressively moving beyond software into hardware, with plans to launch a smart assistant device in early 2027. The two companies are already competing for developer mindshare, and the hardware race is only heating up.
The case also raises questions about the relationship between startups and established giants. io Products, despite being led by Jony Ive, is still a relatively small company with limited resources. Apple’s resources dwarf those of OpenAI’s hardware division, and the lawsuit could divert attention and funds away from product development. Some analysts have suggested that Apple’s lawsuit is strategically timed to disrupt OpenAI’s product roadmap just as it was about to enter mass production.
What’s next?
The court has not yet set a date for the initial hearing, but legal experts expect one within the next 30 days. Both sides will likely seek a preliminary injunction to prevent further alleged misappropriation or to block the litigation’s impact on ongoing business. Discovery is expected to be lengthy and contentious, especially given the involvement of multiple entities and the highly technical nature of the trade secrets involved.
Meanwhile, the rival lawsuit filed by iyO is moving forward, with a scheduled status conference in August. That case could offer early insight into the strength of the evidence against OpenAI and io Products, as it involves similar allegations of trade secret theft from a similarly positioned hardware startup. If iyO succeeds in proving its case, it could strengthen Apple’s position by demonstrating a pattern of behavior.
For now, the tech world watches closely as two of Silicon Valley’s most powerful players prepare for a legal showdown that could redefine how trade secrets are protected in the AI era. OpenAI’s succinct denial may be just the opening move in a battle that will play out over many months.
Source:9to5Mac News