‘Rotten to its core’ — Apple files an explosive lawsuit against OpenAI

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mso-ansi-font-size:10.0pt;<br> mso-bidi-font-size:10.0pt;<br> font-family:Aptos,sans-serif;<br> mso-ascii-font-family:Aptos;<br> mso-fareast-font-family:Aptos;<br> mso-hansi-font-family:Aptos;<br> mso-font-kerning:0pt;<br> mso-ligatures:none;}<br>@page WordSection1<br> {size:595.3pt 841.9pt;<br> margin:72.0pt 72.0pt 72.0pt 72.0pt;<br> mso-header-margin:35.4pt;<br> mso-footer-margin:35.4pt;<br> mso-paper-source:0;}<br>div.WordSection1<br> {page:WordSection1;}<br> /* List Definitions */<br> @list l0<br> {mso-list-id:159780858;<br> mso-list-type:hybrid;<br> mso-list-template-ids:1159211390 134807553 134807555 134807557 134807553 134807555 134807557 134807553 134807555 134807557;}<br>@list l0:level1<br> {mso-level-number-format:bullet;<br> mso-level-text:;<br> mso-level-tab-stop:none;<br> mso-level-number-position:left;<br> text-indent:-18.0pt;<br> font-family:Symbol;}<br>@list l0:level2<br> {mso-level-number-format:bullet;<br> mso-level-text:o;<br> mso-level-tab-stop:none;<br> mso-level-number-position:left;<br> text-indent:-18.0pt;<br> font-family:Courier New;}<br>@list l0:level3<br> {mso-level-number-format:bullet;<br> mso-level-text:;<br> mso-level-tab-stop:none;<br> mso-level-number-position:left;<br> text-indent:-18.0pt;<br> font-family:Wingdings;}<br>@list l0:level4<br> {mso-level-number-format:bullet;<br> mso-level-text:;<br> mso-level-tab-stop:none;<br> mso-level-number-position:left;<br> text-indent:-18.0pt;<br> font-family:Symbol;}<br>@list l0:level5<br> {mso-level-number-format:bullet;<br> mso-level-text:o;<br> mso-level-tab-stop:none;<br> mso-level-number-position:left;<br> text-indent:-18.0pt;<br> font-family:Courier New;}<br>@list l0:level6<br> {mso-level-number-format:bullet;<br> mso-level-text:;<br> mso-level-tab-stop:none;<br> mso-level-number-position:left;<br> text-indent:-18.0pt;<br> font-family:Wingdings;}<br>@list l0:level7<br> {mso-level-number-format:bullet;<br> mso-level-text:;<br> mso-level-tab-stop:none;<br> mso-level-number-position:left;<br> text-indent:-18.0pt;<br> font-family:Symbol;}<br>@list l0:level8<br> {mso-level-number-format:bullet;<br> mso-level-text:o;<br> mso-level-tab-stop:none;<br> mso-level-number-position:left;<br> text-indent:-18.0pt;<br> font-family:Courier New;}<br>@list l0:level9<br> {mso-level-number-format:bullet;<br> mso-level-text:;<br> mso-level-tab-stop:none;<br> mso-level-number-position:left;<br> text-indent:-18.0pt;<br> font-family:Wingdings;}<br><br>--gt;<br>Apple surprised the tech industry after financial markets closed Friday with news the company has sued OpenAI, alleging theft of trade secrets for ChatGPT hardware. The lawsuit particularly targets some senior ex-Apple employees now working at OpenAI. Apple’s suit names two former employees — Chang Liu and Tang Tan, former vice president for product design, iPhone and Apple Watch — as well as OpenAI and that company’s recently-acquired firm, io Products, alleging “trade secret misappropriation and breach of contract.” Jony Ive, who sold io Products to OpenAI, is not named in the lawsuit, though it seems relevant that Tan was one of the senior ex-Apple executives who founded that company. For its part, OpenAI issued a brief statement in response to the litigation. “We have no interest in other companies’ trade secrets,” the company said. “We remain focused on building innovative technology that empowers people everywhere.” The allegations against Tan Some of the claims and allegations included in Apple’s lawsuit include: That in the months before leaving Apple, Tan met with OpenAI or its collaborators and discussed meetings with a key Apple supplier. He emailed himself information about suppliers and internal summaries. When interviewing former Apple staffers for jobs, he used confidential information, such as internal project code names, to gain even more knowledge. He asked candidates to bring actual parts from Apple to interviews to discuss — and a then-Apple employee screenshotted and downloaded files concerning a highly confidential Apple project before attending an OpenAI recruitment session. Tan asked Apple employees to bring CAD/design artifacts to their interviews. Tan allegedly instructed new hires on how to avoid scrutiny when leaving Apple, such as instructing them not to tell the company they had taken jobs at OpenAI. The ‘so funny’ laptop bug The lawsuit also claimed that after quitting Apple for OpenAI in January 2026, Chang Liu managed to keep or “otherwise acquire” an Apple-issued notebook which he used to access confidential data on the company’s private network while at OpenAI. “LOL, I found out I can access the [server], so funny,” Liu texted a friend still working at Apple. The suit alleges that he made no effort to report the situation, which was a bug in the system he had uncovered. Apple eventually discovered the exfiltration was taking place and took steps to prevent it, but Liu allegedly downloaded more than 1,000 pages of data, including “confidential technical presentations, spreadsheets, PDFs, and written work product,” Apple said. “Only OpenAI and Mr. Liu know all the ways they have been exploiting the trove of Apple confidential information he stole, and to the extent they have not concealed or destroyed the evidence of these misappropriations, it will be investigated thoroughly in discovery.” Apple’s lawsuit also alleges Liu was simultaneously coaching a current Apple employee named Alyssa Peng on how to copy files from Apple workstations without triggering the security team, asking her to get specific confidential information and using Apple’s stolen data to help her get ready for an eventual OpenAI interview. Why this could get bigger There’s much in the litigation that it will garner serious international attention as it unfolds. Apple’s argues that a competitor with access to so much of its own proprietary information could “bypass years of independent research and development, skip the capital expenditure required to build genuine expertise, and bring products to market faster and at lower cost, harming the value of Apple’s investments.” It’s not just the secrets behind actively-used processes Apple is protecting; the company is also asserting its rights to regain control of information it has assembled over time concerning processes and manufacturing attempts that have failed. That’s understandable – you can invest a lot of money in finding out what doesn’t work and knowing that is a trade secret in itself. “OpenAI coaches candidates to prepare for their interviews by studying Apple’s confidential engineering documentation, internal presentations, and proprietary technical materials,” the litigation claims. “OpenAI then uses its insider Apple information to ask detailed questions to extract more: about Apple’s proprietary tools, vendor management processes, engineering methodologies, manufacturing workflows, and supplier relationships, for example. “OpenAI has turned to trade secret misappropriation to free-ride off Apple’s decades of innovation,” Apple said. “This is the tip of the iceberg.” The lawsuit also confirms that Apple often designs and customizes the specialized machinery used in its suppliers’ factories, and that trade secrets concerning those efforts have been grabbed. The suit notes that OpenAI works with established Apple suppliers Foxconn, Luxshare, and Goertek on its own hardware. If true, these allegations go right to the top of OpenAI’s hardware development plans. Tan is now OpenAI’s Chief Hardware Officer. The lawsuit points out that OpenAI now employs more than 400 Apple engineers and executives (including the company’s former Vision Pro Vice President), suggesting its entire approach to hardware recruitment is based on extracting Apple’s proprietary knowledge from potential hires. “Apple lacks visibility into what’s been happening behind closed doors at OpenAI, where such misconduct is normalized and exemplified by leadership,” the lawsuit argues. “This much is clear, however: 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. As a natural result, OpenAI’s nascent hardware business now rests on the shakiest of foundations, rotten to its core by its illegal reliance on misappropriated trade secrets.” You can follow me on social media! Join me on BlueSky, LinkedIn, Mastodon, and subscribe to The Core.