Apple has filed a federal lawsuit against OpenAI, alleging theft of trade secrets for a "nascent hardware business" and naming two former key Apple employees now at OpenAI as defendants.

Apple Inc. has filed a federal lawsuit in San Jose, accusing OpenAI of stealing trade secrets related to hardware development, according to court documents filed July 10, 2026. The complaint, lodged in the U.S. District Court for the Northern District of California (Case No. 5:26-cv-07078), targets OpenAI Foundation, OpenAI Group PBC, io Products, LLC, and two former Apple employees, Chang Liu and Tang Yew Tan.

The Cupertino-based tech giant alleges a "coordinated pattern of misconduct at an institutional level" by OpenAI, claiming that "Apple's former employees stealing Apple's trade secrets for the benefit of OpenAI." The suit specifically ties the alleged theft to OpenAI's burgeoning hardware ambitions, which Apple states are "rotten to its core by its illegal reliance on misappropriated trade secrets."

Tang Yew Tan, formerly Apple's Vice President of product design and a key figure in the development of the iPhone and Apple Watch, is now OpenAI's Chief Hardware Officer. Chang Liu, a former senior systems electrical engineer at Apple, is also named as a defendant, accused of misappropriating Apple's proprietary information. Apple claims it had reached out to OpenAI in February 2026 regarding concerns over confidential data handling but received no response.

OpenAI spokesperson Drew Pusateri provided a brief statement, saying, "We remain focused on building innovative technology that empowers people everywhere." However, as of this reporting, OpenAI has not filed a formal response to the lawsuit, nor have key executives like Sam Altman or Tim Cook of Apple issued direct public comments on the matter. The precise nature of OpenAI's "nascent hardware business" remains unclear, with Apple's complaint referring to it broadly as an effort to find a "new way to interact with AI that goes beyond 'traditional products and interfaces.' "

This legal battle marks a significant escalation in the increasingly competitive AI landscape, particularly as AI companies venture into physical products. It echoes past disputes over intellectual property in the Bay Area's tech ecosystem and highlights the critical importance of talent and proprietary design in an era of rapid technological convergence. What specific hardware OpenAI is developing, and the full extent of "io Products, LLC's" involvement, have yet to be detailed in public filings.