Apple sued OpenAI in the U.S. District Court for the Northern District of California on Friday, July 10, 2026. The iPhone maker alleges that the ChatGPT creator took its intellectual property to develop its own consumer hardware. It's a striking turn for two companies that were, not too long ago, close partners, with ChatGPT being integrated into iOS back in 2024.
Apple Claims OpenAI Used Former Engineers to Access Secret Hardware Information
Apple's filing states that the misconduct occurred "at every level, from members of its Technical Staff to its Chief Hardware Officer, and in coordination with business partners." The suit names OpenAI and its hardware subsidiary io Products, alongside OpenAI hardware chief Tang Tan and former Apple engineer Chang Liu as defendants.
Tan, a 25-year Apple veteran who once led the design of iPhones and Apple Watches, left in 2024 to help build what became OpenAI's hardware division alongside John Ive, who leads OpenAI's design work.
Apple alleges Tan used the OpenAI hiring process to extract confidential information. According to the Cupertino giant, Tan directed candidates still employed at Apple to bring actual hardware components, CAD files and prototypes to "show and tell" interview sessions.
Liu, an eight-year Apple engineer who left the Cupertino brand to join OpenAI in January 2026, is separately accused of keeping a company laptop and exploiting a server bug to download hardware presentations and manufacturing documents after his departure.
Apple also alleges OpenAI approached two of its manufacturing partners to extract details on a proprietary metal-finishing technique and battery components. If proven true, these actions could give OpenAI an unfair advantage by allowing it to learn from Apple's years of R&D while avoiding the costly trial-and-error process Apple went through.
OpenAI Denies Wrongdoing as Apple Seeks Protection of Its Trade Secrets
Apple says it raised these concerns directly with OpenAI in February 2026 and asked the company to investigate, but never received a response, which ultimately prompted the lawsuit. OpenAI has denied wrongdoing, with a spokesperson stating in a statement to CNBC, "We have no interest in other companies' trade secrets. We remain focused on building innovative technology that empowers people everywhere."
The entire dispute primarily stems from OpenAI's $6.5 billion acquisition of io Products, Ive's hardware startup co-founded with Tan, former Apple design chief Evans Hankey and ex-Apple manager Scott Cannon. Neither Ive nor Hankey face personal allegations in the suit.
Apple claims more than 400 former employees have joined OpenAI to date, many of whom are from the hardware division now led by incoming Apple CEO John Ternus. For those unaware, Tim Cook is stepping down as Apple CEO, and it will take effect on September 1, 2026.
OpenAI is reportedly developing its own agentic AI phone while preparing for a high-profile IPO, both of which this lawsuit could complicate. Apple is asking the court to bar OpenAI from using its confidential information, return any Apple materials and preserve evidence for the case.
Notably, Apple says its existing ChatGPT-Siri partnership is unrelated to this suit. But with over 400 former Apple employees now at OpenAI, this may be the opening chapter in what could be quite a long fight.
