Apple sues OpenAI: the partnership that brought ChatGPT to the iPhone ends up in court

The partnership that put ChatGPT at the heart of the iPhone in 2024 has just become one of the tech industry's most striking legal battles. On Friday, July 10, Apple filed suit in federal court in the Northern District of California, in San Jose, accusing OpenAI of misappropriating its trade secrets to accelerate development of its first consumer device. Named alongside the company led by Sam Altman are its chief hardware officer, Tang Tan — a 24-year Apple veteran — engineer Chang Liu, and io Products, the firm co-founded by designer Jony Ive that OpenAI acquired in 2025. Ive himself is not a defendant.

What Apple actually alleges

The 41-page complaint brings six claims: four for trade secret misappropriation under the federal Defend Trade Secrets Act — against Liu, Tan, OpenAI and io — and two for breach of the intellectual property agreements Liu and Tan signed as Apple employees. "This case is about Apple's former employees stealing Apple's trade secrets for the benefit of OpenAI," the filing opens, describing an alleged pattern operating "at every level, from members of its Technical Staff to its Chief Hardware Officer, and in coordination with business partners."

The episodes it recounts read like a corporate thriller — though for now they are only one side's account. Liu, a senior systems electrical engineer on the iPhone line for eight years, left Apple in January to join OpenAI. According to the complaint, he failed to return a company laptop, and weeks later discovered that a then-unknown authentication bug still let him into Apple's internal file servers. "LOL, I found out I can access the [network storage], so funny," he allegedly wrote to a former colleague, before downloading dozens of confidential files — including documentation on how Apple manufactures and tests the iPhone's main logic boards.

As for Tan, the lawsuit describes recruiting practices allegedly designed to extract information: quizzing candidates about unannounced Apple products using their internal code names; directing applicants still working in Cupertino to bring "Actual parts" — batteries, logic boards, shields — to interviews featuring "show and tell" sessions; and circulating among new hires an internal Apple document, marked "Need to Know," that details the security checks the company runs when an employee leaves. The filing further contends that OpenAI, through io, got one of Apple's manufacturing partners to perform a secret metal-finishing technique for its benefit, "misleading the partner to believe they had Apple's permission to do so."

Apple says it wrote to OpenAI in February to raise its concerns, and that "OpenAI never responded."

From partners to rivals

The two companies' public story had been far friendlier. In June 2024, Apple announced ChatGPT's integration into Siri and its writing tools as part of Apple Intelligence, live since late that year. The complaint itself notes, in a footnote, that this commercial agreement — still in force — is not at issue in the case.

The collision is about hardware. In 2024, Tan co-founded io Products with other former Apple executives as OpenAI's dedicated hardware vehicle; in May 2025, OpenAI bought the startup for roughly $6.5 billion and put Tan in charge of a division that, per the complaint, has hired scores of Apple engineers — more than 400 former Apple employees now work at OpenAI, the filing says. That same year, OpenAI announced a partnership with Foxconn, the iPhone's assembler, and engaged Luxshare and Goertek, two established Apple suppliers. By November it had confirmed the first prototypes of its device, and in April its chief financial officer said its consumer hardware would launch "towards the end of this year."

What both sides say

"Recently, significant evidence has emerged suggesting individuals employed by OpenAI wrongfully took Apple's secret and confidential information regarding our unreleased technologies, processes, and products," Apple said in a statement, adding that it will "always defend our teams' hard work and innovations."

OpenAI rejected the accusations. "We have no interest in other companies' trade secrets. We remain focused on building innovative technology that empowers people everywhere," spokesperson Drew Pusateri said.

What's at stake for the industry

Apple's allegations are, for now, exactly that: one party's account, which OpenAI will have the chance to rebut and which the courts — the case has been assigned to Magistrate Judge Virginia DeMarchi in San Jose — will ultimately weigh. But the dispute matters well beyond its protagonists. The race to build AI hardware has set off an unprecedented war for talent, and this case will test where the legal line sits between hiring the best engineers — entirely lawful in California, where non-compete agreements are generally unenforceable — and benefiting from the confidential know-how they carry with them. Apple is asking for injunctions that would force OpenAI to return its materials and stop using the disputed information, and has said it will seek preliminary relief promptly. If granted, those orders could complicate the timeline of the device OpenAI hopes to ship this very year. The opening battle — the one that will decide whether AI's most anticipated gadget arrives on schedule, and with whose engineering — will play out over the coming months.