Apple has filed a major lawsuit against OpenAI, accusing the artificial intelligence company of orchestrating a coordinated effort to steal its trade secrets and confidential hardware technology to accelerate the development of its own consumer AI devices.
The lawsuit, filed on Friday, July 10, in the U.S. District Court for the Northern District of California, alleges trade secret misappropriation, breach of contract and unlawful acquisition of proprietary information. It marks one of the most significant legal battles yet in the rapidly expanding AI hardware race and signals a dramatic deterioration in the relationship between two companies that only recently collaborated on artificial intelligence initiatives.
In its court filings, Apple claims OpenAI systematically targeted its engineering talent, proprietary research and supply chain to gain an unfair competitive advantage in developing AI-powered hardware.
The lawsuit names several defendants, including OpenAI’s nonprofit foundation and commercial entities, OpenAI Chief Hardware Officer Tang Tan, former Apple senior electrical engineer Chang Liu and io Products, the AI hardware startup founded by former Apple design chief Jony Ive that OpenAI acquired in 2025.
Although Ive founded io Products, he is not personally named as a defendant.
According to Apple, OpenAI hired more than 400 former Apple employees as part of what the company describes as an aggressive recruitment campaign aimed at acquiring confidential knowledge about unreleased products, hardware architecture and manufacturing techniques.
Apple alleges that the hiring effort went beyond ordinary recruitment and became a deliberate strategy to obtain sensitive intellectual property.
Among the most serious allegations is Apple’s claim that former executives instructed prospective employees to bring physical Apple components—including batteries, circuit boards and prototype parts—to job interviews in what the company describes as “show-and-tell” sessions designed to expose proprietary engineering work.
The lawsuit also accuses OpenAI of exploiting Apple’s extensive manufacturing network by encouraging suppliers to disclose confidential production techniques, including advanced metal-finishing processes and battery technologies developed exclusively for Apple’s devices.
Apple further alleges that one former engineer exploited a security vulnerability after accepting a position at OpenAI, downloading confidential files onto an Apple-issued laptop that was never returned to the company.
The iPhone maker argues that these actions formed part of a broader effort to shortcut years of internal research and development.
Apple is seeking substantial monetary damages as well as a permanent injunction that would prohibit OpenAI from using, retaining or benefiting from any confidential Apple technology obtained through the alleged misconduct.
The company contends that immediate court intervention is necessary to prevent further misuse of its intellectual property as OpenAI expands into consumer hardware.
The legal battle arrives at a particularly sensitive moment for OpenAI.
Court documents referenced in the filing indicate that OpenAI’s anticipated AI hardware products will not reach the market until at least April 2027. The company is also expected to abandon its planned “io” branding following legal and strategic complications surrounding the acquisition.
Those developments could significantly reshape OpenAI’s hardware roadmap as the company prepares for what is expected to be one of the technology sector’s most closely watched initial public offerings.
The dispute also highlights the collapse of a corporate relationship that once appeared mutually beneficial.
In 2024, Apple integrated OpenAI’s ChatGPT into its ecosystem as part of its artificial intelligence strategy, positioning the partnership as a key element of its next-generation software experience.
Just two years later, the companies now find themselves on opposite sides of a high-stakes legal battle that underscores intensifying competition in the AI industry.