Apple Defends OpenAI over Hardware Secrets

Apple wrote a case against OpenAI and its chief hardware officer on Friday for stealing the iPhone-maker’s trade secrets, including unreleased parts and prototypes, secret designs, and secret work documents.

The lawsuit accuses OpenAI’s chief hardware officer Tang Tan, who served for 24 years apple and supervision iPhone product design, and partners at an AI company encouraging people who are leaving or considering leaving Apple to bring proprietary and unreleased technology. Tan says he helped trainers circumvent Apple’s protocols and told them to bring Apple’s secrets to OpenAI job interviews.

“OpenAI’s new business now rests on an unstable, highly corrupt foundation based on misplaced reliance on trade secrets,” Apple said in the lawsuit, which was filed in US District Court in San Jose. The company explains that OpenAI wants to “take illegal shortcuts” while it is “under pressure to deliver its first commercial product.”

OpenAI and Tan did not immediately respond to a request for comment.

Apple spokeswoman Hannah Smith says the company will “always protect our teams’ hard work and innovation, and we’re doing everything we can.”

The case opens what could be the most difficult and dramatic battle over intellectual property theft in Silicon Valley since independent Waymo in 2017 accused Uber of stealing technology when it brought in a former Waymo engineer who left with thousands of confidential files. Uber agreed to pay $245 million to settle the lawsuit mid-trial the following year.

Apple and OpenAI they have become friends from 2024, when the company announced the mark sales distribute ChatGPT on iPhones, Macbooks, and iPads. But that relationship has soured in recent years, leading Apple to rely more on Google’s Gemini AI technology as the foundation for the company’s in-house AI industry. OpenAI and Apple are expected to compete heavily in the coming years front market for AI-powered consumer devices.

OpenAI has hired more than 400 former Apple employees, according to the lawsuit. This includes some former Apple veterans leading OpenAI in the development of AI-powered consumer devices. Last year, OpenAI paid $6.5 billion to start It’s called io Products and it was created by long-time Apple executives including Tan, Scott Cannon, Evans Hankey, and famous designer Jony Ive.

io Products and Chang Liu, an electrical engineer at OpenAI who was at Apple until January, were also named as defendants. (Liu did not immediately respond to a request for comment.)

Apple’s investigation into the alleged theft relies on data and communications collected from its employees’ devices. The company was hit with a theft case earlier this year before Liu returned his company-issued laptop and wrote to a former colleague that he still had access to Apple’s internal files, according to the lawsuit. (Apple says in a post that Liu’s access was supported by a bug that has been fixed.)

Liu “downloaded Apple’s confidential files related to hardware,” including presentations about the design and testing of circuit boards used in Apple devices, the lawsuits said. It adds that Liu also trained an Apple employee who was recruiting him to join OpenAI on how to “‘avoid trouble with the security team’ by copying Apple’s confidential files.”

Apple wrote to OpenAI in February to raise initial concerns about the theft but they did not respond. This led to further investigation and prosecution.

Apple learned that before he left, Tan had sent himself an email about the company’s suppliers. Other employees who go to OpenAI will do the same, Apple says. In addition, Tan “has ordered job candidates who are still working at Apple to bring ‘Real parts’ from Apple to their interviews to ‘show and tell’ parts where he and his team at OpenAI can reveal Apple’s confidential information,” the lawsuit says, citing batteries, sound boards, and shields as the desired items.