Apple sued OpenAI on July 10, 2026, alleging that the AI lab stole trade secrets related to hardware design. The lawsuit names OpenAI, IO Products, and two former Apple employees: Tang Tan and Chang Liu.

The allegations are specific and damaging. Apple alleges that Tan, who was vice president of product design at Apple, emailed himself Apple’s supplier information before leaving the company. Chang Liu, an Apple electrical engineer now at OpenAI, allegedly exploited a bug in Apple’s network to download files about unreleased products.

The Alleged Scheme

Tan allegedly used internal Apple codenames when interviewing candidates at OpenAI. He requested current Apple employees bring “actual parts” to OpenAI interviews for “show and tell” sessions. This suggests a systematic effort to gather intelligence on Apple’s hardware roadmap.

Liu’s actions are more serious. He accessed Apple’s network using a colleague’s laptop and exploited a previously unknown vulnerability to open shared folders. He then downloaded hardware-related files about unreleased products. This crosses into espionage territory.

What Apple Is Protecting

Apple is building its own AI hardware. The company sees custom silicon as critical to competing with Google, Microsoft, and others. OpenAI is also designing AI hardware. The timing of Tan’s departure and Liu’s network access suggests coordination.

The lawsuit signals that Apple will fight to protect its design process and supplier relationships. It also signals that the AI hardware space is no longer just about software—physical products and manufacturing know-how matter.

What This Case Could Mean

If Apple wins, OpenAI might face injunctions, damages, and restrictions on using certain technologies. If OpenAI wins, it signals that recruiting people from competitors is fair game, even if they bring knowledge with them.

This is not just a legal dispute. It’s a bet on whether hardware expertise and trade secrets can be protected in an era of rapid AI development and talent poaching.