Apple Falls Out With OpenAI: 400 Employees, Stolen Laptops, and Misled Suppliers
Apple has fallen out with OpenAI: 400 employees, stolen laptops, and suppliers who got played. On July 10, Apple filed a 41-page complaint with the U.S. District Court for the Northern District of California. The defendants are OpenAI and two former Apple employees.
This isn't your run-of-the-mill patent dispute. Apple drops a heavy line in the complaint: "OpenAI's hardware business has been built on stolen goods from day one."
💡 What You Will Learn
Apple has fallen out with OpenAI: 400 employees, stolen laptops, and suppliers who got played. On July 10, Apple filed a 41-page complaint with the U.S. District Court for the Northern District of Cal
📜 Table of Contents
Apple Falls Out With OpenAI: 400 Employees, Stolen Laptops, and Suppliers Left in the Dark
On July 10, Apple filed a 41-page complaint with the U.S. District Court for the Northern District of California. The defendants are OpenAI and two former Apple employees.
This is no ordinary patent dispute. Apple made a heavy accusation in the filing: "OpenAI's hardware business has been built on stolen secrets from day one."
If this holds up, OpenAI's entire hardware plan could be back to square one.
The Backstory
Let's lay out the timeline first.
In 2024, Apple's Vice President of Product Design, Tang Tan, left the company. He had spent 24 years at Apple, leading the development of core hardware like the iPhone, Apple Watch, and AirPods. After leaving, he co-founded AI hardware company io Products with former Apple Chief Design Officer Jony Ive.
In 2025, OpenAI acquired io Products for $6.5 billion. Tang Tan became OpenAI's Chief Hardware Officer.
In February 2026, Apple sent a letter to OpenAI stating, "Your hiring practices have us concerned that confidential information is leaking," and requested a discussion. OpenAI did not respond.
On July 10, 2026, Apple filed its lawsuit.
From partners to courtroom adversaries in less than two years.
Four Allegations, Each More Damning Than the Last
Apple's accusations are structured in four tiers, escalating from employees to executives to suppliers.
Tier One: Rank-and-File Employees "Helping Themselves"
Chang Liu, a former senior systems electrical engineer at Apple, joined OpenAI in January 2025. Apple claims he failed to return his company-issued work laptop and exploited an authentication vulnerability to remotely access Apple's internal network, downloading "dozens" of confidential hardware documents—including detailed designs of unreleased products, engineering presentations, technical specifications, and proprietary project data.
Tier Two: Executives Orchestrating "Organized Exfiltration"
Tang Tan is the central figure. Apple alleges that before his departure, he emailed Apple supplier information and internal industry summaries to himself. More egregiously, during interviews with Apple employees, he would ask them to bring Apple's "actual parts" to the interview. The complaint quotes one interviewee's reaction: "I didn't even know we were allowed to take these things out of the office."
Tier Three: Suppliers "Kept in the Dark"
This is the most serious allegation. Apple says OpenAI, through io Products, approached a supplier that had worked with Apple for years and told them "Apple has authorized this." The supplier believed it and helped OpenAI with a metal surface finishing process unique to Apple. Apple calls it a "trade secret metal-finishing technique"—comprised of process parameters, tooling designs, and quality control procedures Apple had accumulated over many years.
Tier Four: Systematic "Anti-Security" Training
Apple says OpenAI has a complete "avoidance playbook": teaching departing employees how to avoid disclosing who their next employer is, how to avoid triggering the "immediate escort-out" protocol, and how to continue accessing internal information during the standard two-week notice period.
400 People Is No Small Number
One figure in the complaint stands out: more than 400 former Apple employees currently work at OpenAI.
Apple says it's "not surprising" that some of them hold Apple's confidential information. The question is how many of those 400 were systematically poached, and how many took things they shouldn't have before leaving.
Last month, Apple's top executive in charge of smart glasses also announced his departure to join OpenAI. This shows OpenAI's recruiting targets are very clear—they want Apple's hardware talent.
How the Two Giants' Partnership Fell Apart
Two years ago, Apple and OpenAI were Silicon Valley's most dazzling AI alliance. At WWDC, OpenAI's Sam Altman showed up in person, and Apple's software chief Craig Federighi publicly called OpenAI "a pioneer and market leader in the AI field." Siri could directly call on ChatGPT, and the iPhone's Visual Intelligence feature relied on OpenAI's models.
But cracks quickly appeared. OpenAI later felt the partnership wasn't delivering the expected returns and even considered suing Apple for breach of contract. Tensions escalated.
The root cause is simple: both companies want to build the entry-point product for the "post-smartphone era."
Apple is developing smart glasses, smart pendants, and AirPods with cameras. OpenAI, according to reports, is also developing a "smart speaker" with a built-in camera that can converse directly with users without a phone. When two giants want the same thing, partnership turns into competition.
PP Foresight analyst Paolo Pescatore put it bluntly: "Apple sees OpenAI transforming from a partner into a potential rival, while OpenAI is trying to reduce its dependence on the iPhone."
How Big Is This?
Stanford Law School professor Mark Lemley's assessment: "If Apple's allegations are true—employees took confidential documents, and OpenAI is using them—then OpenAI is in trouble."
Rutgers Law School professor Camilla Hrdy points out that previous AI trade secret cases mostly involved software, but this one involves hardware—metalworking, supply chains, manufacturing processes. These are core moats Apple has spent over 20 years building, not something OpenAI can quickly replicate by throwing money at it.
Apple is asking the court to order OpenAI to destroy all materials in question and redesign its products to ensure they contain no Apple technology. If the court rules in Apple's favor, OpenAI's hardware business could be back to the drawing board.
OpenAI's response was brief, just one sentence: "We have no interest in other companies' trade secrets and remain focused on building innovative technology."
But the direction of this lawsuit isn't something one sentence can decide.
Sources: Apple v. OpenAI complaint (U.S. District Court for the Northern District of California, July 10, 2026), Bloomberg, Reuters, The Verge, Wall Street CN, Securities Times
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