Apple calls OpenAI's hardware business 'rotten to its core' in trade secret theft lawsuit

Apple is suing OpenAI and two of its former employees who currently work at the AI company, for theft of its trade secrets. In a lawsuit filed in federal court Friday, Apple alleges extensive misconduct by the company it once partnered with, describing its hardware business as "rotten to its core."

The lawsuit also names io Products, the Jony Ive-led hardware startup acquired by OpenAI last year, as complicit in the trade secret theft. It doesn't mention Ive by name, but described the organization as complicit in "a coordinated pattern of misconduct at an institutional level" within OpenAI.

The filing also names Chang Liu, a former senior system electrical engineer at Apple, and Tang Yew Tan, a former Apple VP who is now OpenAI's Chief Hardware Officer. Apple claims that both Liu and Tan shared trade secrets with OpenAI. Liu, according to Apple's lawyers, "surreptitiously accessed and downloaded dozens of Apple's confidential hardware-related files, including voluminous, detailed information about unreleased products, engineering presentations, technical specifications, and proprietary project data."

Apple also claims that Tan "has directed job candidates still working for Apple to bring 'actual parts' from Apple to their interviews for 'show and tell' sessions in which he and his team at OpenAI can elicit still more Apple confidential information." In all, Apple says that more than 400 of its former employees have taken jobs at OpenAI and that the company's interview process if structured "to try to solicit additional confidential Apple information."

OpenAI didn't immediately respond to a request for comment on the allegations. The company "never responded" when Apple reached out about its concerns, the lawsuit says.

In the filing, Apple says that it's likely not aware of the full extent of OpenAI's misconduct. "This much is clear, however: at every level, from members of its Technical Staff to its Chief Hardware Officer, and in coordination with business partners, OpenAI has been stealing Apple's trade secrets and confidential information," it says. "As a natural result, OpenAI's nascent hardware business now rests on the shakiest of foundations, rotten to its core by its illegal reliance on misappropriated trade secrets."

The lawsuit comes as Apple is still partnering with OpenAI for Apple Intelligence. In a footnote, Apple says that its existing agreement, which allows the iPhone maker to integrate chatGPT into its devices, "is not at issue here" and that its allegations of trade secret theft have "no connection" to the arrangement.