Apple is suing OpenAI for stealing AI hardware secrets
Apple has accused OpenAI of stealing Apple’s trade secrets and intellectual property during the development of an AI hardware device. In a lawsuit filed in the Federal District Court for the Northern District of California, Apple stated that it had uncovered evidence of a months-long conspiracy to steal confidential information.
Apple accuses OpenAI’s hardware director and former Apple designer Tang Tan, as well as former electrical engineer Chang Liu, of instructing Apple employees applying to OpenAI to disclose details of unreleased devices, components, manufacturing processes, and supplier relationships.
In a statement, Apple explained that it is filing the lawsuit to protect the hard work of its employees.
“At Apple, our teams continuously develop groundbreaking technologies to create the best products and services in the world. Protecting their work and intellectual property is of utmost importance to us. However, strong evidence has recently emerged suggesting that OpenAI employees have unlawfully stolen confidential information from Apple about our unreleased technologies, processes, and products. We will always defend the hard work and innovations of our teams and will take all necessary steps to ensure this.”
Tan is accused of using his inside knowledge of Apple’s exit process to enable employees to covertly pass on information and provide OpenAI with crucial information about Apple suppliers that facilitated OpenAI’s work on an AI device. From the complaint:
“OpenAI also instructs new employees on how to avoid investigations when they leave Apple. For example, Mr. Tan warns them not to inform Apple that they have accepted a position at OpenAI in order to remain with Apple as long as possible. After his own departure, Mr. Tan unlawfully retained or obtained an internal Apple management document marked ‘Need to Know’ that outlines the security procedures for departing employees.” Messages on Apple-issued work devices prove that Mr. Tan and his OpenAI colleagues shared this document with new employees before they informed Apple of their departure, thus giving them insight into Apple’s security protocols. Unsurprisingly, Apple’s investigation revealed that employees moving to OpenAI systematically attempt to circumvent the security measures designed to protect sensitive Apple information.
Apple stated that it had discovered a pattern of former employees, including Tan, emailing each other confidential information after leaving the company. Others allegedly misused their knowledge of confidential trade secrets to assist OpenAI in hardware development. OpenAI apparently used confidential hardware information when contacting suppliers and persuaded one company to use a specific, secret metal finishing process for an OpenAI device by claiming to have Apple’s approval.
According to Apple, evidence found on an employee’s company-issued device indicates that Tan instructed her to bring “some parts” she had worked on to a job interview. This meant she should show batteries, SIPs, logic boards, and other hardware. This was not an isolated incident; Apple claims several applicants at OpenAI were asked to do the same.
OpenAI employee exploits Apple security vulnerability
After leaving Apple, Liu allegedly kept a company-provided laptop and, while working at OpenAI, exploited a security vulnerability to download dozens of confidential documents. He also maintained contact with Yu-Ting “Alyssa” Peng, an Apple employee who regularly briefed him on Apple’s projects, supplier decisions, and technical details. Upon learning he still had access to Apple’s systems, Liu texted Peng: “Haha, I found out I can access it [the network storage], so funny.”
Apple accuses OpenAI’s leadership of creating a culture of hardware theft, stating that OpenAI’s hardware business is “rotten to the core” because it relies on information stolen from Apple.
This is just the tip of the iceberg. Apple has no insight into the workings behind closed doors at OpenAI, where such misconduct is normalized and modeled by the leadership. However, one thing is certain: at all levels, from technical staff to the Chief Hardware Officer, and in collusion with business partners, OpenAI has stolen trade secrets and confidential information from Apple. As a result, OpenAI’s fledgling hardware business is now on shaky ground and has been shaken to its core by the illegal use of unlawfully acquired trade secrets.
Apple attempted to contact OpenAI in February after learning of the potential theft. When OpenAI did not respond, Apple launched a further investigation. Apple claims that OpenAI was under pressure to bring a hardware device to market, leading the company to compromise on quality instead of investing in legitimate development. “OpenAI is guilty of the unlawful appropriation of trade secrets to profit from Apple’s decades of innovation,” the lawsuit states.
John Ive and Sam Altman were not directly sued
Former Apple design chief and OpenAI designer Jony Ive is not mentioned by name in the lawsuit, which is directed against io Products, acquired by OpenAI. Although OpenAI CEO Altman is mentioned, he is not named as a defendant, and Apple makes no indication that Ive or Altman were involved. Apple also does not appear to be targeting OpenAI’s ongoing recruitment of Apple employees, although the lawsuit mentions that more than 400 former Apple employees now work at OpenAI.
Apple mentions its ongoing partnership with OpenAI for Siri ChatGPT integration, but only to clarify that the agreement plays no role in the legal dispute.
Previous rumors suggested that the relationship between Apple and OpenAI had deteriorated, with OpenAI allegedly considering legal action against Apple because the integration had not met either OpenAI’s expectations or Apple’s promises.
In its lawsuit alleging theft of trade secrets, Apple is seeking an injunction prohibiting OpenAI from possessing, using, and distributing its technologies, as well as damages “to be determined in court.” Apple is also suing Tan and Liu for breach of contract, alleging they violated their agreements with Apple.
OpenAI responds to Apple’s lawsuit
OpenAI has responded after being sued by Apple for allegedly stealing the iPhone manufacturer’s trade secrets.
“We have no interest in the trade secrets of other companies,” said OpenAI spokesman Drew Pusateri. “We remain focused on developing innovative technologies that empower people everywhere.”
