Apple Sues OpenAI for Trade Secret Theft in Blockbuster Hardware Dispute
The simmering tensions between Apple and OpenAI have erupted into a high-stakes legal battle. On July 10, 2026, Apple officially filed a blockbuster 41-page federal lawsuit against OpenAI, io Products, and two former Apple employees—Chang Liu and Tang Yew Tan—in the U.S. District Court for the Northern District of California (Apple Inc. v. Chang Liu et al., Case No. 5:26-cv-07078).
The complaint, drafted by Weil Gotshal, alleges a coordinated, systematic pattern of trade secret theft designed to jumpstart OpenAI's nascent consumer hardware division using Apple's proprietary designs, supplier specifications, and manufacturing processes.
The Core Allegations
Apple’s complaint outlines highly specific, forensic evidence of trade secret misappropriation:
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Chang Liu's Laptop and Authentication Exploit: Chang Liu, an eight-year Apple engineer, allegedly failed to return his Apple-issued work laptop upon departing for OpenAI. He allegedly left a message on a colleague's laptop stating, "I still have another computer" to access Apple information. While employed at OpenAI, Liu allegedly exploited a rare, previously unknown authentication bug to access Apple's shared network folders, messaging a colleague:
"LOL, I found out I can access the [network storage], so funny." To which current Apple employee Yu-Ting "Alyssa" Peng allegedly replied: "I'm ready." Liu allegedly downloaded over a thousand pages of confidential hardware files, including technical presentations on Main Logic Boards (MLBs).
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Tang Yew Tan's "Show and Tell" Interviews: Tang Yew Tan, Apple’s former Vice President of Product Design for iPhone and Apple Watch, now serves as OpenAI's Chief Hardware Officer. Apple alleges Tan methodically used internal project codenames to probe Apple candidates during interviews and instructed them to bring physical Apple prototypes—such as "Batteries," "SIP" (Systems-in-Package), "mlb," and "shields"—to OpenAI offices for "show and tell" sessions. One candidate allegedly expressed concern, noting he "didn't even know we could take those from the office."
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Deceiving Apple's Supplier Network: OpenAI allegedly used Apple's confidential terminology to approach an exclusive Apple partner, misleading the supplier into running a proprietary, trade-secret metal-finishing technique for OpenAI by claiming they had Apple's permission to do so.
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Systemic Exit Coaching: The complaint alleges OpenAI actively coached departing Apple employees to hide their new destination to avoid Apple's immediate security offboarding (the "dreaded walk out") and instructed them not to sign any exit agreements.
Pre-Suit Talks Ruined by Email Mix-Up
The lawsuit also reveals a bizarre breakdown in pre-suit communications. According to reporting by NBC News, Apple's outside counsel, Gabriel Gross of Weil Gotshal, attempted to contact OpenAI's General Counsel, Che Chang, in February 2026 to resolve the dispute. However, Gross mixed up two OpenAI employees with similar surnames, emailing Che Chang to thank him for a phone call Gross had actually had with a different employee named Wang. Chang, confused, replied: "I don't know who he is and we have never spoken." Believing OpenAI was refusing to cooperate, Apple's counsel ceased talks, and the lawsuit was filed months later.
OpenAI has formally denied the claims, stating it is "not aware of any evidence" that the suit has merit. However, Apple's complaint indicates it will "promptly" file a motion for a preliminary injunction, which could freeze OpenAI's hardware efforts long before a final verdict.