Apple Trade Secrets Case Adds Pressure to OpenAI’s Hardware Strategy

Apple’s trade secrets lawsuit against OpenAI alleges that former employees shared confidential hardware information with the AI company. The case could affect OpenAI’s hardware plans and add legal uncertainty as reports suggest the company may consider an IPO.
Apple Trade Secrets Case Adds Pressure to OpenAI’s Hardware Strategy
Written By:
Kelvin Munene
Reviewed By:
Achu Krishnan
Published on
Updated on

Apple has expanded its trade secrets case against OpenAI by sending preservation letters to about 40 former employees now at the company. The letters ask recipients to keep relevant documents and communications. They request meetings with Apple’s legal team.

The action follows Apple’s lawsuit filed on July 10 in the Northern District of California. Apple accuses OpenAI, io Products, and two former Apple employees of using confidential hardware information. OpenAI denies any interest in rivals’ trade secrets. The claims remain untested in court.

Apple Widens its Search for Evidence

Apple named former employees Chang Liu and Tang Yew Tan in the complaint. Tan serves as OpenAI’s chief hardware officer after years at Apple. Liu worked as a senior electrical engineer at Apple.

The complaint alleges Liu kept a company laptop and later accessed Apple’s network through an authentication flaw. Apple alleges he downloaded many confidential internal Apple hardware files. It also claims Tan emailed himself supplier details and internal reports before leaving Apple. Both claims remain allegations.

Apple also says Tan encouraged Apple employees interviewing at OpenAI to bring physical parts for “show and tell” sessions. One candidate allegedly said, “I didn’t even know we could take those from the office.” OpenAI has not publicly answered each claim.

The preservation letters show Apple wants records from a wider group than the two employees named in court. More than 400 former Apple workers now work at OpenAI, according to Apple’s filing. Employee movement alone does not prove trade secret theft under California law.

Hardware Plans Face Court Scrutiny

OpenAI moved deeper into consumer hardware after buying io Products, a company linked to former Apple design chief Jony Ive. Reuters valued the transaction at $6.5 billion. Apple says OpenAI used hiring practices and supplier contacts to speed up its hardware work.

Apple also alleges OpenAI approached Apple suppliers for confidential production information. One claim involves a metal-finishing method that Apple describes as secret. Apple says a supplier believed OpenAI had permission to use the process. OpenAI disputes the accusation.

The court could examine emails, interview records, product files, and supplier communications during discovery. Apple may seek limits on technology that a judge finds connected to protected information. No court has ruled that OpenAI used Apple trade secrets.

OpenAI said, “We have no interest in other companies’ trade secrets.” It added that the company focuses on building technology for users. The statement does not address the separate claims against Tan, Liu, or io Products.

OpenAI IPO Plans Meet New Legal Risk

Reports say OpenAI has considered a public listing in late 2026 or 2027. The company has not announced an IPO date. Previous statements from OpenAI said a listing was not its main focus.

The Apple OpenAI lawsuit adds another item for banks and investors to review before any share sale. An IPO filing must describe material lawsuits, business risks, management matters, and possible costs. The case may also require OpenAI to explain whether its hardware plans rely on disputed information.

A long discovery process could overlap with IPO preparations. It could expose internal messages, hiring records and product development documents. However, the lawsuit does not automatically stop a listing and Apple has not proved its claims.

The dispute comes after Apple and OpenAI worked together to add ChatGPT access to Apple devices in 2024. Their relationship now includes cooperation and competition. The legal case will proceed separately from any reported IPO timetable.

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