Apple sues OpenAI over stolen hardware trade secrets

OpenAI faces yet another high-profile legal battle, this time from Apple. The lawsuit, filed in Northern California federal court, accuses three former Apple employees—Tang Tan (former VP of Apple Watch), Chang Liu (iPhone systems engineer), and Yu-Ting 'Alyssa' Peng—of stealing trade secrets for OpenAI's benefit. Tan, who spent 24 years at Apple before becoming OpenAI's chief hardware officer after the company acquired Jony Ive's io startup, allegedly asked prospective employees to bring Apple hardware for 'show and tell' during interviews and coached them on how to avoid Apple's offboarding security procedures. The complaint claims Apple's hardware trade secrets are 'one of the most valuable intellectual assets in all of American business.' OpenAI has not yet publicly shown a hardware product, but it plans to release a device in 2027, having paid nearly $6.5B for Ive's startup.

The lawsuit adds to OpenAI's mounting legal troubles, which include a copyright case from The New York Times, a wrongful death suit from the family of a teenager who confided in ChatGPT, and multiple actions from Elon Musk. The timing is particularly challenging as OpenAI prepares for an IPO after confidentially filing its S-1 with the SEC, faces investor pressure to turn a profit, and has cut side projects to focus on enterprise and coding. Legal experts note that the trade secret question is a 'trillion-dollar issue' that won't be resolved until higher courts rule on AI training fair use. Apple's hardware expertise contrasts with OpenAI's reputation in software, underscoring the industry adage that 'hardware is hard.' The outcome could set a precedent for how AI companies acquire talent and develop physical products.