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Apple filed a lawsuit against OpenAI on Friday, accusing the ChatGPT maker and two former Apple employees of stealing trade secrets to speed up its move into consumer hardware. The suit marks a sharp turn in a relationship that has grown increasingly tense.

The complaint, filed in the U.S. District Court for the Northern District of California, claims OpenAI ran a coordinated effort to obtain and use Apple’s confidential information through former staff, hiring practices and supplier ties. Apple says this helped OpenAI push into the hardware business faster than it could have on its own.

OpenAI pushed back in a statement. “We have no interest in other companies’ trade secrets,” the company said. “We remain focused on building innovative technology that empowers people everywhere.”

At stake is control over what future AI devices will look like, and whether they’ll rely on apps and operating systems the way phones do now. If OpenAI succeeds in building a device that competes for consumer attention, it could cut into iPhone sales. Analysts say OpenAI is already working on a phone or some other physical product.

The lawsuit lands just days after OpenAI beat back a legal challenge from Elon Musk’s xAI, so the company is fighting on two fronts.

Paolo Pescatore, an analyst at PP Foresight, said the dispute reflects how much the two companies’ interests have diverged. “Apple sees OpenAI moving from partner to potential rival, while OpenAI is trying to reduce its dependence on the iPhone and build a direct relationship with consumers,” he said. “Even if the allegations are not proven, the lawsuit could delay OpenAI’s hardware ambitions and further weaken what is already becoming an increasingly fragile partnership.”

Two former employees named

The lawsuit names Chang Liu, a former senior system electrical engineer at Apple, and Tang Yew Tan, who served as vice president of product design for the iPhone and Apple Watch before leaving. Neither responded to requests for comment.

Apple alleges Liu never returned a company laptop and later exploited an authentication bug to get into Apple’s internal network, where he downloaded dozens of confidential hardware files.

Tan, who now leads hardware at OpenAI, worked on the iPhone for most of his 24 years at Apple, according to his LinkedIn profile. Apple claims Tan spent his final months at the company emailing himself information about Apple’s suppliers and internal industry summaries, calling it a methodical effort to benefit OpenAI before he left.

Apple also alleges Tan told colleagues to bring Apple parts to job interviews at OpenAI for “show and tell” sessions. In one instance cited in the filing, an OpenAI job candidate reportedly said he “didn’t even know we could take those from the office.”

The suit names OpenAI Foundation, OpenAI Group PBC and io Products, the hardware startup OpenAI acquired, as additional defendants.

Apple says it tried to raise the issue first

According to the complaint, Apple wrote to OpenAI in February to flag concerns that its confidential information was reaching the company, and asked to discuss it. Apple says it never got a response.

More than 400 former Apple employees now work at OpenAI, the filing states, and Apple acknowledges that some of them naturally carry knowledge of its trade secrets. But the company argues that doesn’t give OpenAI license to use that information.

“That OpenAI now employs people who were once entrusted with Apple’s trade secrets does not entitle OpenAI to use that information to jumpstart its hardware efforts,” Apple wrote in the complaint.

The filing also claims OpenAI employees approached Apple suppliers for confidential details, and in one case got a supplier to carry out a proprietary metal-finishing technique, believing OpenAI had Apple’s permission to use it.

Legal experts weigh in

Mark Lemley, a professor at Stanford Law School, said Apple’s complaint “has the potential to be a very big case.” He noted that some of what Apple describes, like OpenAI hiring hundreds of former Apple staff, isn’t illegal under California law, which generally allows employees to move freely to competitors.

“But if Apple’s claims that the employees took confidential documents with them, and that OpenAI is using those documents, are true, that is a problem for OpenAI,” Lemley said.

Camilla Hrdy, a law professor at Rutgers Law School, said the case is likely to get complicated because most past trade secret disputes involving AI have centered on software, not hardware.

“These trade secret lawsuits are frequently brought in the tech space, and we usually learn much, much more as the case develops,” Hrdy said. “OpenAI is not a defendant that can’t afford to defend itself.”

A partnership under strain

A person familiar with the matter told Reuters in May that OpenAI had been weighing legal options against Apple of its own, including notifying Apple of a possible breach of contract without necessarily filing a full lawsuit.

The two companies had been working together as recently as 2024, when Apple folded OpenAI’s ChatGPT into its Apple Intelligence system, giving Siri and other apps access to it. Under that partnership, iPhone users can get ChatGPT answers through Siri and sign up for ChatGPT memberships directly from their phone’s settings menu.

Apple rolled out a long-delayed overhaul of Siri last month, two years after first promising the upgrades and repeatedly pushing back the timeline.

OpenAI, meanwhile, has been building out its own hardware ambitions. Last year, it bought io Products, a startup founded by former Apple design chief Jony Ive, in a deal worth $6.5 billion. Ive is not named as a defendant in Apple’s lawsuit.