Apple has initiated a lawsuit against OpenAI, accusing the AI company of stealing trade secrets and violating contract terms. The suit, filed on July 10, 2026, in the U.S. District Court for the Northern District of California, names OpenAI's senior leadership, including Chief Hardware Officer Tang Tan, a former Apple veteran with 24 years at the company. Apple alleges that Tan orchestrated activities such as using confidential project code names during OpenAI’s hiring process, instructing candidates to bring Apple hardware components to interviews, and coaching departing Apple employees to circumvent security measures. These allegations arise amid rumors that OpenAI is developing its first hardware product, potentially a smartphone that could rival the iPhone.

Apple’s complaint also points to other former employees like Chang Liu, who allegedly failed to return an Apple laptop after joining OpenAI and downloaded confidential technical documents related to unreleased Apple products. The stolen information reportedly includes engineering presentations, technical specifications, and proprietary project data. Apple claims this conduct is part of a wider strategy by OpenAI to obtain its trade secrets through improper means, including prompting Apple employees to share designs and prototype details during recruitment. The lawsuit also accuses OpenAI of replicating Apple’s proprietary metal finishing technology for its own hardware development without authorization.

In response, OpenAI has denied any interest in theft or use of another company's confidential information, emphasizing its focus on creating innovative technologies. Meanwhile, Apple is seeking legal action to prevent OpenAI’s use or disclosure of its trade secrets, to recover all confidential materials, and to preserve key evidence through discovery. Apple’s filing expresses concern about the extent of the alleged misconduct within OpenAI, describing its emerging hardware business as founded on misappropriated secrets and orchestrated by high-level leadership. The dispute highlights escalating tensions as AI firms expand into hardware markets traditionally dominated by established tech giants like Apple.

This lawsuit follows Apple’s recent efforts to protect its intellectual property amid the shifting competitive landscape where AI companies like OpenAI are making moves into consumer hardware. The acquisition of former Apple lead designer Jony Ive’s startup io by OpenAI last year for $6.5 billion underlines OpenAI’s serious ambitions in hardware design, increasing the stakes for Apple. With former Apple insiders leading OpenAI’s hardware efforts and substantial evidence of alleged confidential information misuse, this legal battle could have significant implications for both companies and the broader tech industry.