Apple sues OpenAI over trade secret theft claims

Apple has filed a lawsuit against OpenAI, alleging the ChatGPT maker poached its employees and coaxed them into handing over confidential designs and tightly held trade secrets to build a rival hardware device, a dramatic rupture between two firms that were partners barely two years ago.

“Recently, significant evidence has emerged suggesting individuals employed by OpenAI wrongfully took Apple’s secret and confidential information regarding our unreleased technologies, processes and products,” an Apple spokesperson said in an email.

The complaint, filed on Friday, pulls no punches. “OpenAI’s nascent hardware business now rests on the shakiest of foundations, rotten to its core by its illegal reliance on misappropriated trade secrets,” Apple wrote.

Among those named is Tang Yew Tan, OpenAI’s chief hardware officer and a former Apple vice-president, who is accused of taking information about Apple suppliers with him and encouraging interviewees to divulge confidential material.

“He has directed job candidates still working for Apple to bring ‘actual parts’ from Apple to their interviews for ‘show and tell’ sessions in which he and his team at OpenAI can elicit still more Apple confidential information,” reads the complaint.

Another former Apple employee, Chang Liu, is accused of leaving with an Apple laptop and using an authentication bug to breach the company’s internal network, downloading “dozens of Apple’s confidential hardware-related files”.

Drew Pusateri, a spokesperson for OpenAI, said the company was reviewing the court filing. “We have no interest in other companies’ trade secrets,” he added. “We remain focused on building innovative technology that empowers people everywhere.”

From partners to plaintiffs

The lawsuit is a sharp turnaround for two companies that announced a major partnership in 2024, when Apple agreed to integrate ChatGPT into the operating systems of iPhones, iPads and Macs. When Apple showcased its revamped Siri voice assistant last month, however, its AI component was built on Google’s Gemini model instead.

Tensions began to simmer when OpenAI spent $6.4bn acquiring io Products, the hardware startup founded by former Apple design guru Jony Ive, which is also named in the suit. The litigation lands at an awkward moment for OpenAI, which is preparing one of the largest stock market flotations the technology sector has ever seen.

Apple is seeking damages and a court order blocking OpenAI from possessing or using its trade secrets.

The lesson for UK business owners

If a company with Apple’s security apparatus and legal firepower can allegedly watch its secrets walk out of the door with departing staff, smaller firms should pay attention. Loss of intellectual property remains one of the biggest threats to any business, and in most SMEs the crown jewels sit in far fewer heads, with far fewer safeguards.

In the UK, trade secrets are protected under the common law of confidence and the Trade Secrets (Enforcement, etc.) Regulations 2018, but only where a business can show it took reasonable steps to keep the information secret. The Intellectual Property Office advises limiting access to those who need it, setting clear expectations and using non-disclosure agreements.

For owner-managers, the practical basics are cheaper than any courtroom: watertight confidentiality clauses in employment contracts, exit procedures that revoke system access on day one, and a clear record of who can see what. The do’s and don’ts of protecting intellectual property are well established, and almost all of them work best before a dispute rather than during one.

Apple v OpenAI will be fought by armies of Californian lawyers. For everyone else, the smarter money is on making sure the show and tell never happens.

Jamie Young

Jamie is Senior Reporter at Business Matters, bringing over a decade of experience in UK SME business reporting.
Jamie holds a degree in Business Administration and regularly participates in industry conferences and workshops.

When not reporting on the latest business developments, Jamie is passionate about mentoring up-and-coming journalists and entrepreneurs to inspire the next generation of business leaders.