Apple and OpenAI are heading toward a major lawsuit over allegations that former Apple employees took confidential information to the artificial intelligence company as it develops new consumer hardware.

Apple sued OpenAI, OpenAI’s hardware subsidiary io Products and two former Apple employees, Chang Liu and Tang Yew Tan, in July 2026. The iPhone maker alleges that its former employees misappropriated trade secrets and that OpenAI benefited from the information as it builds its own hardware business.

OpenAI has now asked a federal judge to dismiss the case, arguing that Apple has not adequately identified the trade secrets at issue or plausibly shown that OpenAI or the individual defendants misappropriated them.

The dispute comes at a particularly sensitive moment. OpenAI is increasingly moving beyond software and into consumer hardware, while Apple is defending the information and supply-chain relationships behind some of the world’s most valuable devices.

What is Apple accusing OpenAI of doing?

Apple’s lawsuit alleges a broader pattern of misconduct involving former employees who moved from Apple to OpenAI.

At the center of the complaint are Chang Liu, a former Apple senior systems electrical engineer, and Tang Yew Tan, Apple’s former vice president of product design for the iPhone and Apple Watch.

Liu worked at Apple for eight years before joining OpenAI in January 2026. Apple alleges that after leaving, he failed to complete Apple’s exit procedures and exploited an authentication vulnerability to access Apple’s network storage. The company says he accessed confidential technical information relating to Apple’s products.

Tan spent 24 years at Apple and later became OpenAI’s chief hardware officer. Apple alleges that he used knowledge gained at Apple to help OpenAI recruit employees and obtain confidential information about Apple’s products, suppliers and manufacturing processes.

Apple’s complaint describes the alleged conduct as part of a coordinated effort to obtain information that could help OpenAI develop consumer hardware.

Why is OpenAI asking the court to dismiss the lawsuit?

OpenAI’s response is essentially that Apple’s allegations do not meet the legal threshold required to keep the case alive.

The company argues that Apple has failed to clearly identify specific trade secrets that were actually taken or used by OpenAI.

OpenAI says Apple has instead relied on broad categories such as hardware engineering, supplier relationships and supply-chain operations. According to OpenAI’s motion, those broad categories do not automatically qualify as legally protected trade secrets.

OpenAI also disputes Apple’s interpretation of the conduct involving Liu and Tan.

The AI company says Apple has taken ordinary workplace and recruiting interactions and presented them as evidence of a coordinated theft scheme.

That is a crucial point because the current proceedings are not a final determination of whether trade secrets were actually stolen.

The judge must first determine whether Apple’s allegations, if accepted as true for purposes of the motion, are sufficiently specific and plausible to allow the case to proceed.

What does OpenAI say happened with Chang Liu?

Liu’s case is one of the clearest examples of the two companies’ sharply different interpretations of the same events.

Apple alleges that Liu continued accessing Apple’s confidential files after leaving the company and used an authentication vulnerability to gain access to Apple’s network storage.

OpenAI tells a different story.

The company says Apple employees themselves contacted Liu after his departure and asked him to help locate information. OpenAI argues that Apple’s systems continued allowing former employees to access certain files because Apple had not properly managed their permissions.

OpenAI says there is no allegation that Liu actually provided a file to OpenAI or used Apple’s information in OpenAI’s hardware development.

The dispute therefore goes beyond whether Liu accessed information.

The key legal question is what information he accessed, whether it qualified as a protected trade secret, whether the access was unauthorized and whether it was actually used or disclosed for OpenAI’s benefit.

What does Apple allege about Tang Tan?

The allegations against Tan are broader and potentially more consequential because of his senior role in OpenAI’s hardware operation.

Apple says Tan had access to some of the company’s most sensitive product-development information during his 24 years at Apple.

The complaint alleges that, before leaving Apple, Tan communicated with OpenAI and its collaborators about an important Apple supplier. Apple also alleges that he emailed himself information concerning suppliers and the consumer electronics industry.

Apple further claims that Tan used internal Apple project information during OpenAI recruitment.

One allegation is that he used a confidential Apple project codename while asking a candidate about an unreleased product.

Another concerns interviews in which Apple employees allegedly were asked to bring actual components or provide information about their work.

Apple says the recruitment process was being used to obtain information about areas such as:

• Unreleased products
• Component selection
• Manufacturing processes
• CAD and design tools
• Vendor relationships
• System-integration methods
• Supplier communications

What does OpenAI say about Tan’s recruiting?

OpenAI rejects Apple’s interpretation of these events.

The company says Tan explicitly told recruits that confidential information from other companies should not be brought to OpenAI.

OpenAI also disputes Apple’s characterization of Tan’s possession of certain Apple documents, arguing that the materials were related to legitimate recruiting and offboarding concerns rather than a strategy to evade Apple’s security controls.

This creates one of the central factual disputes in the case.

Apple sees a pattern in Tan’s behavior.

OpenAI sees ordinary recruiting activity being presented out of context.

Those competing narratives will become much easier to test if the case proceeds to discovery, when both sides can seek emails, messages, documents and other evidence.

Why is OpenAI developing hardware?

The lawsuit is closely connected to OpenAI’s broader move into physical consumer devices.

OpenAI acquired io, the hardware company founded by former Apple design chief Jony Ive, in a deal reported at approximately $6.5 billion. Ive was not named as a defendant in Apple’s lawsuit.

The acquisition gave OpenAI access to a team with deep experience designing consumer electronics.

OpenAI has not publicly released its first major consumer device, but reports have suggested that the company is developing an AI-focused product that could challenge traditional hardware categories.

That makes Apple’s concerns more understandable from a competitive standpoint.

Apple’s argument is not simply that OpenAI hired former employees.

It is that OpenAI hired people with extensive knowledge of Apple’s hardware operations and allegedly used that knowledge to accelerate a competing hardware business.

Could OpenAI’s hardware compete with Apple?

Potentially, yes.

OpenAI’s hardware ambitions could eventually place it in competition with Apple in areas involving smartphones, personal computing, wearable technology or new AI-centric devices.

The exact form of OpenAI’s first major consumer product remains uncertain.

But the strategic significance is clear: OpenAI wants AI to move beyond applications running on existing devices and become part of the physical interface through which consumers interact with technology.

That could eventually challenge Apple’s position as a dominant consumer-device ecosystem.

It also explains why information about Apple’s manufacturing processes, suppliers, industrial design and hardware engineering could be commercially valuable.

What exactly is a trade secret?

A trade secret is not simply any piece of confidential corporate information.

Under US law, information generally must derive economic value from not being generally known and must be subject to reasonable measures to keep it secret.

That distinction is important in this case.

A company’s broad knowledge of how to design electronics is not automatically a trade secret.

But a specific manufacturing process, unreleased engineering design, proprietary supplier arrangement or confidential technical specification could potentially qualify if the legal requirements are satisfied.

Apple says its complaint identifies specific protected information.

OpenAI argues that Apple has relied too heavily on broad descriptions rather than clearly identifying the secrets it says were misappropriated.

The court will ultimately have to determine whether Apple’s complaint contains enough detail to move forward.

Why is the lawsuit important for the tech industry?

The case could have consequences beyond Apple and OpenAI.

The technology industry depends heavily on employees moving between competing companies.

Engineers, designers and executives often carry years of specialized knowledge with them when they change jobs.

Companies therefore have to balance two competing interests:

• Employees’ ability to change jobs and use their general experience
• Employers’ right to protect genuinely confidential information

The Apple-OpenAI case puts that tension under an unusually bright spotlight.

If Apple’s allegations survive, the case could lead to deeper scrutiny of how technology companies recruit employees from competitors and how they prevent confidential information from crossing corporate boundaries.

If OpenAI succeeds in dismissing the case, it could reinforce the importance of clearly identifying specific trade secrets and demonstrating a plausible connection between alleged misconduct and actual use or disclosure.

What happens next in the Apple-OpenAI case?

OpenAI’s motion to dismiss is an early stage of the litigation.

Apple has strongly rejected OpenAI’s arguments and continues to pursue the case.

Apple has also asked the court for a preliminary injunction that would restrict the defendants while the litigation proceeds. A hearing on that request is scheduled for October 1, 2026, according to court filings.

Apple’s request is significant because a preliminary injunction could impose restrictions before the underlying dispute reaches a final judgment.

At the same time, the broader lawsuit could take years to resolve.

If the judge allows the case to proceed, discovery could expose communications and internal documents involving Apple’s former employees, OpenAI’s hardware team and the companies’ recruitment practices.

That evidence could determine whether Apple’s allegations represent a genuine trade-secret case or a dispute over ordinary employee mobility and competitive hiring.

Why the case matters for Apple’s future

The lawsuit arrives at a sensitive moment for Apple.

The company is facing intense pressure to demonstrate that it can compete in the generative-AI era while continuing to protect the hardware ecosystem that has made it one of the world’s most valuable technology companies.

OpenAI, meanwhile, is attempting to transform itself from an AI software company into a broader technology platform.

The two companies are already partners in one area: ChatGPT is integrated into Apple’s ecosystem.

But their relationship is becoming increasingly complicated as OpenAI expands into hardware that could eventually compete with Apple’s products.

That makes the lawsuit unusually consequential.

It is not simply a dispute over two former employees.

It is also a battle over how much proprietary knowledge can move with employees when they leave one of the world’s most valuable technology companies to join a rapidly expanding rival.

The bottom line

Apple says former employees helped OpenAI gain access to confidential information that could strengthen its push into consumer hardware.

OpenAI says Apple has not identified actual trade secrets with enough specificity and has distorted ordinary recruiting and employee-offboarding events into allegations of corporate theft.

Neither side has won the underlying dispute.

The court’s immediate task is narrower: deciding whether Apple’s lawsuit meets the legal standard necessary to continue.

The next major milestone is the October 1 preliminary-injunction hearing.

Until then, the most important fact to keep in mind is that the allegations remain contested. Apple’s complaint contains serious accusations, but OpenAI has denied wrongdoing and is asking the court to dismiss the case at an early stage.

What makes the dispute especially significant is what sits behind it: OpenAI is trying to build a hardware business, Apple is trying to protect its closely guarded technology and supply chain, and both companies now have a powerful reason to scrutinize what happens when employees cross from one side to the other.