Apple Sues OpenAI: $852B AI Lab Accused of Trade Secret Theft in 41-Page Filing

For legal professionals, the case crystallizes high‑stakes trade‑secret litigation at the intersection of employee mobility and AI hardware competition. Apple’s 41‑page complaint – replete with code names, hardware component theft, and evasion coaching – sets up a critical test of the Defend Trade Secrets Act and California’s employee non‑compete restrictions, while the looming $852 billion IPO adds immense pressure on OpenAI to resolve the matter quickly.

On July 10, 2026, Apple sued OpenAI in the U.S. District Court for the Northern District of California, alleging a coordinated campaign to steal trade secrets related to unannounced hardware products. The 41-page complaint accuses OpenAI’s Chief Hardware Officer Tang Tan – a 24-year Apple veteran who led iPhone and Apple Watch design – of using Apple’s confidential project code names during recruiting, instructing candidates to bring proprietary components to interviews, and coaching departing Apple employees on how to circumvent security procedures. Separately, former Apple engineer Chang Liu allegedly retained an Apple-issued laptop after joining OpenAI and used it to download sensitive technical documents describing undisclosed technologies. Apple is seeking damages and an injunction barring OpenAI from further use of the allegedly misappropriated material. The suit names OpenAI, its hardware subsidiary io Products (acquired from Jony Ive’s startup for $6.5 billion in May 2025), and the two former employees.

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OpenAI, valued at approximately $852 billion, has raised over $180 billion from investors and is reportedly pursuing an initial public offering; the litigation introduces substantial legal risk that could delay or disrupt those plans.

The lawsuit emerges at a critical juncture. OpenAI, valued at approximately $852 billion, has raised over $180 billion from investors and is reportedly pursuing an initial public offering; the litigation introduces substantial legal risk that could delay or disrupt those plans. Moreover, OpenAI is widely expected to launch its first consumer hardware device – rumored to be an AI-agent smartphone that would compete directly with the iPhone, according to analyst Ming-Chi Kuo in April 2026. Apple’s core hardware business, with annual iPhone revenues exceeding $200 billion, would be directly threatened by such a product, making the allegations of trade secret theft particularly explosive.