In one of the most dramatic legal battles in the tech industry's history, Apple has filed a sweeping 41-page lawsuit against OpenAI, accusing the AI giant of orchestrating a systematic, multi-year campaign to steal Apple's trade secrets and build a competing hardware business on stolen intellectual property.
The complaint, filed on July 10 and detailed further in subsequent reports, paints an extraordinary picture of alleged misconduct that ranges from the shocking to the almost comical. According to Apple, over 400 former Apple employees now work at OpenAI — a figure the company says makes it "not surprising that certain OpenAI personnel have knowledge of Apple's confidential and proprietary information."
'Rotten to Its Core'
The lawsuit alleges that OpenAI turned trade secret theft into company policy. "OpenAI's nascent hardware business now rests on the shakiest of foundations, rotten to its core by its illegal reliance on misappropriated trade secrets," the complaint reads. Apple claims the alleged misconduct was "normalized and exemplified by leadership."
'LOL, I Found Out I Can Access the Network Storage'
Perhaps the most striking allegation involves Chang Liu, a former senior systems electrical engineer at Apple who joined OpenAI. Apple claims Liu discovered he could access Apple's internal network storage through an authentication bug, and texted a colleague still at Apple: "LOL, I found out I can access the [network storage], so funny." The colleague allegedly replied, "I'm ready." Hours after leaving Apple, Liu allegedly texted "I still have another computer," referring to an Apple machine he planned to use to continue accessing confidential information.
Show and Tell With Apple Parts
In some of the wildest allegations, Apple claims OpenAI directed job candidates who were Apple employees to bring "actual parts" from Apple to their interviews for "show and tell sessions." One candidate reportedly expressed surprise, saying he "didn't even know we could take those from the office." Candidates were also allegedly instructed to bring "CAD/design artifacts" and "prototypes." OpenAI's chief hardware officer Tang Yew Tan — who spent 24 years at Apple as VP of product design for iPhone and Apple Watch — is named as a defendant.
Avoiding the 'Dreaded Walkout'
Apple alleges that OpenAI circulated an internal Apple document bearing a "Need to know" designation to new hires, coaching them on how to avoid Apple's security exit procedures — known internally as the "dreaded walkout." The complaint alleges that OpenAI advised departing employees not to sign any exit paperwork and to let OpenAI know "asap" if asked to sign anything when quitting.
The io Connection
The lawsuit also targets io, a company founded by former Apple employees including Jony Ive that OpenAI acquired last year for $6.5 billion. Apple alleges io used Apple's confidential metal-finishing techniques by misleading an Apple partner into believing it had permission. The complaint alleges OpenAI approached a supplier using Apple's internal terminology to ask questions that "only Apple-insiders would know to ask."
'This Is the Tip of the Iceberg'
Apple warned the alleged misconduct represents only "a fraction" of what will be uncovered during legal discovery. "Discovery will expose that the misappropriation has been occurring on a scale many times greater," the complaint states. Apple says it first contacted OpenAI in February to raise concerns but never received a response.
OpenAI has responded with a brief statement: "We have no interest in other companies' trade secrets. We remain focused on building innovative technology that empowers people everywhere."
Analysts believe OpenAI is developing a smartphone or other consumer hardware device to compete directly with the iPhone, making the stakes of this lawsuit extraordinarily high for both companies. The case is widely seen as a landmark legal confrontation that could reshape the boundaries of employee mobility and intellectual property in the AI era.
