Apple Sues OpenAI for Systematic Theft of Trade Secrets, Raising Global Legal Risks for the AI Sector
Federal lawsuit filed on July 10 in Northern California alleges that OpenAI executives, including former Apple Vice President Tang Tan, guided candidates to share trade secrets during job interviews.
On July 10, Apple filed a federal lawsuit in the Northern District of California accusing OpenAI of building its hardware strategy through systematic appropriation of confidential information. The initial complaint states that the scheme reached "all levels, from technical staff to the hardware director, and in coordination with business partners."
At the center of the allegations is Tang Tan, currently OpenAI's hardware director and a former Apple vice president, whom the company alleges provided direct instructions to job candidates at OpenAI to share Apple secrets during interviews. A second defendant, Chang Liu, worked at Apple for eight years as a senior electrical systems engineer. After leaving the company in 2026 to join OpenAI, he allegedly retained a corporate laptop and used it to transfer confidential technical documents to personal devices, including specifications for unreleased products, supplier data, and supply chain details.
The Logic Behind the IO Products Acquisition
The lawsuit is not disconnected from OpenAI's larger bet outside of software. In 2025, the company acquired IO Products, a startup founded by former Apple chief design officer Jony Ive, for $6.4 billion. IO Products was promoted as the core of OpenAI's effort to create a consumer-facing AI device. To build hardware from scratch, the company needed in-depth knowledge of suppliers, components, and business relationships—precisely the asset that Apple’s supply chain has accumulated over two decades of negotiations with manufacturers in Asia.
While the complaint does not name supply partners, Apple operates with close contracts with Hon Hai Precision (Foxconn, Taiwan), Murata Manufacturing, and TDK (Japan) and, in the case of the iPhone 17 Pro, with Tata Electronics in Tamil Nadu, India. Data regarding pricing, exclusivity, and installed capacity from these partners represents a critical competitive advantage in the consumer hardware industry, and it is exactly this type of data that the petition indicates may have been compromised.
OpenAI has denied the allegations. "We have no interest in the trade secrets of other companies. We remain focused on building innovative technology that empowers people around the world," said a spokesperson for the company.
From Partnership to Court
The lawsuit marks a definitive break from an agreement that, in 2024, appeared to align the two most relevant players in the consumer AI market. That year, Apple and OpenAI formed a partnership that integrated ChatGPT into iOS 18, exposing OpenAI's assistant to hundreds of millions of iPhone users. The relationship soured when OpenAI announced the acquisition of IO Products: Apple came to view the company not as a software partner but as a direct competitor in the race for consumers' wallets.
The action targets individual accountability: the names Tang Tan and Chang Liu in the complaint mean that legal risk falls on executives and engineers transitioning between large tech companies, not just on the organizations.
Precedent for Consulting and Recruitment in AI
The lawsuit establishes a risk that goes beyond the two companies involved. Accenture, TCS, Infosys, and Wipro actively recruit from Apple, Google, and Microsoft. If Apple’s legal theory prevails, companies hiring former Big Tech employees in sensitive positions will need to formalize protocols for screening and isolating confidential information upon arrival to demonstrate they did not benefit from potential leaks.
In India, the impact is twofold. The country is now Apple’s largest manufacturing hub outside China, with Tata Electronics and Foxconn operating large-scale plants in Tamil Nadu and Karnataka. At the same time, India is the leading global exporter of engineering talent to AI companies in the United States. The intersection between this talent flow and Apple’s sensitive supply chain creates a specific legal risk vector that Indian IT firms, including TCS and Infosys, will need to map alongside their legal departments.
In Japan, major component suppliers for the iPhone, such as Murata, TDK, and Sony Semiconductor Solutions, maintain confidentiality agreements with Apple. The possibility that commercial data involving these partners has been compromised adds a layer of exposure that legal departments in Tokyo are already assessing. For any global company recruiting from Big Tech, the lawsuit filed on July 10 is not just corporate news; it is a precedent to be read with the legal department.