Apple filed a federal lawsuit against OpenAI on July 10, 2026, in the U.S. District Court for the Northern District of California, alleging a coordinated scheme to steal iPhone and Apple Watch hardware trade secrets directed by OpenAI’s own Chief Hardware Officer. The complaint names two individuals — Tang Tan, OpenAI’s Chief Hardware Officer and a 24-year Apple veteran, and Chang Liu, a former senior Apple engineer — and accuses both of systematically extracting Apple’s confidential hardware designs, manufacturing processes, and proprietary materials technology.
The Allegations Against Tang Tan
Tang Tan spent 24 years at Apple, most recently as Vice President of product design for iPhone and Apple Watch, before joining OpenAI. Apple’s complaint alleges that Tan used his insider knowledge to orchestrate a deliberate intellectual property extraction operation at the leadership level.
According to Apple’s legal filing, Tan asked job candidates still employed at Apple to bring “actual parts” to interviews as “show and tell” — a method Apple alleges was designed to extract physical components and technical information before candidates formally left. Apple also alleges that Tan coached departing employees on how to evade Apple’s standard security procedures during the offboarding process.
Apple’s filing states: “At every level, from members of its Technical Staff to its Chief Hardware Officer, and in coordination with business partners, OpenAI has been stealing Apple’s trade secrets and confidential information.” The complaint describes the alleged conduct as institutional rather than opportunistic.
Chang Liu and the Unreturned Laptop
Chang Liu worked at Apple for eight years as a senior systems electrical engineer before joining OpenAI in 2026. Apple alleges that Liu failed to return an Apple-issued laptop after joining OpenAI, and used that laptop to download confidential technical documents. The filing identifies the downloaded materials as proprietary Apple hardware specifications.
Apple also alleges that a proprietary metal finishing technique — developed internally for Apple products — was used by OpenAI after a partner was allegedly misled into believing Apple had given permission for its use. Apple names the io company, the hardware startup co-founded by former Apple design chief Jony Ive and acquired by OpenAI for $6.5 billion in May 2025, in the filing. Ive himself is not named as a defendant.
The February 2026 Letter OpenAI Did Not Answer
Apple sent a letter to OpenAI in February 2026 raising concerns about the alleged conduct. According to Apple, OpenAI did not respond. Apple filed suit five months later after discovering additional evidence, stating in the complaint that it “lacks visibility into what’s been happening behind closed doors at OpenAI.”
Apple is seeking damages, an injunction to stop OpenAI from using its trade secrets, and a court order requiring OpenAI to return or destroy the misappropriated materials. Because Apple has explicitly stated it cannot quantify the full extent of the theft, the case is positioned as a discovery-intensive lawsuit — more details are expected to surface as the case proceeds.
What OpenAI Is Building — and Why This Matters
Over 400 former Apple employees now work at OpenAI, according to the complaint. OpenAI acquired io in May 2025 for $6.5 billion, the largest hardware acquisition in the company’s history, and Tang Tan leads the hardware organization. No OpenAI consumer hardware device has been officially announced.
Industry analyst Ming-Chi Kuo reported in April 2026 that OpenAI’s device could be an AI-native smartphone that replaces traditional apps with AI agents — a direct competitor to the iPhone at the product category level. Apple’s lawsuit does not specify which unreleased OpenAI product contains the allegedly stolen technology.
OpenAI had not issued a public statement in response to the lawsuit as of July 10, 2026.
Our Take
Apple’s lawsuit is less about the legal outcome and more about the signal: OpenAI is building hardware aggressively enough that Apple believes a spy operation was required. The iPhone’s first credible AI-native competitor may already be designed with Apple’s own trade secrets. For business decision-makers evaluating AI tools, the deeper question this surfaces is which AI company’s products rest on foundations solid enough to trust — and this lawsuit plants a seed of doubt squarely in the middle of OpenAI’s hardware ambitions.
For Context
- OpenAI Seeks $1 Million in Fees From xAI as Musk’s Company Appeals Dismissal — the previous major OpenAI litigation, in which a federal judge dismissed xAI’s countersuit and OpenAI sought fee recovery.
- Apple’s $30 Billion Broadcom Deal Will Build 15 Billion US-Made Chips — Apple’s parallel hardware strategy, investing $30 billion in domestic chip manufacturing through 2026.
- OpenAI GPT-5.6 Sol Launch: Terra, Luna, and Cerebras Speed — the model capability that underpins the AI agents reportedly destined for OpenAI’s unreleased device.
