Apple v. OpenAI: 2 Former Apple Engineers Sued in Trade Secrets Lawsuit

This case will scrutinize the definitions of trade secrets in the AI hardware space and the enforceability of non-disclosure agreements when former employees move to competitors. For legal professionals, it presents a textbook example of the tension between talent mobility and intellectual property protection.

On July 10, 2026, Apple filed a blockbuster lawsuit against OpenAI and its hardware subsidiary IO Products, alleging a systematic theft of trade secrets by former Apple engineers now working for the AI company. The legal action, which also names OpenAI’s chief hardware officer Tang Tan and former Apple employee Chang Liu, marks a stunning collapse of a high-profile 2024 partnership to integrate advanced AI into Apple’s ecosystem. The lawsuit contends that Liu, after leaving Apple in January 2026, improperly accessed Apple’s systems and downloaded dozens of confidential hardware files—including unreleased product designs, engineering presentations, and proprietary project data. In a particularly brazen move, Liu allegedly coached a former colleague on how to copy sensitive files and use the encrypted messaging app Line Messenger to evade Apple’s security detection.

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The legal action, which also names OpenAI’s chief hardware officer Tang Tan and former Apple employee Chang Liu, marks a stunning collapse of a high-profile 2024 partnership to integrate advanced AI into Apple’s ecosystem.

The dispute has its roots in the intense competition for hardware engineering talent that defines the current AI landscape. OpenAI’s 2025 acquisition of Jony Ive’s hardware startup IO Products—a move to build physical devices—placed it in direct conflict with Apple, which has long viewed hardware design as a core competitive advantage. The two employees at the center of the suit are pivotal to OpenAI’s hardware ambitions: Tan oversees hardware strategy, while Liu brought fresh expertise from Apple. Apple’s complaint suggests a pattern of poaching and knowledge transfer that crosses legal boundaries.

In a statement, Apple’s spokesperson declared: “At Apple, our teams are constantly developing breakthrough technologies… Recently, significant evidence has emerged suggesting individuals employed by OpenAI wrongfully took Apple’s secret and confidential information regarding our unreleased technologies, processes, and products. We will always defend our teams’ hard work and innovations.” OpenAI’s Drew Pusateri countered, “We have no interest in other companies’ trade secrets. We remain focused on building innovative technology that empowers people everywhere.”

The implications ripple across multiple domains. For Apple, the lawsuit is a forceful assertion of intellectual property rights but simultaneously risks alienating a key AI partner at a time when it is fighting to catch up in generative AI. The 2024 deal, once hailed as a compromise for Apple’s own slow AI rollout, now appears in shambles. For OpenAI, the allegations threaten to disrupt its hardware roadmap, potentially delaying products that rely on the kind of design and engineering expertise that former Apple employees provide. The case also casts a shadow over OpenAI’s acquisition of IO Products—Jony Ive’s boutique firm—and could expose the startup to legal liability that small ventures are ill-equipped to handle.