Apple filed a federal lawsuit on July 10, 2026, accusing two former employees, along with OpenAI and its hardware subsidiary io Products, of stealing trade secrets tied to the iPhone, Apple Watch and MacBook business to accelerate OpenAI's push into consumer devices. The complaint, lodged in the U.S. District Court for the Northern District of California, San Jose Division, names Chang Liu, a former Senior System Electrical Engineer who left Apple in January 2026, and Tang Yew Tan, a twenty-four-year Apple veteran who now serves as OpenAI's Chief Hardware Officer. It also names OpenAI Foundation, OpenAI Group PBC, and io Products, LLC as corporate defendants.

The filing lands at a moment when OpenAI is simultaneously racing toward a public offering, according to figures cited in the complaint, and pressing to bring its first hardware device to market with designer Jony Ive. Apple's case does not touch the companies' existing commercial agreement covering ChatGPT's integration into Apple Intelligence; the complaint explicitly excludes that relationship from its claims. What it does allege is a pattern spanning individual conduct, corporate recruiting practices, and dealings with Apple's own suppliers.

What the complaint alleges

According to the filing, Apple's internal investigation began after Liu departed the company on January 22, 2026, and failed to respond to routine exit outreach, including a request to schedule an exit interview and confirm the return of company devices. Apple says Liu never returned at least one Apple-issued laptop.

The complaint describes a chain of events that followed. Weeks after leaving, Liu discovered he could still access Apple's network storage, a cloud repository holding engineering files, project documentation and other proprietary material, through what the filing calls a previously unknown authentication vulnerability. Apple's complaint quotes a message Liu sent celebrating the discovery: "LOL, I found out I can access the [network storage], so funny." He then downloaded, according to the filing, dozens of confidential files over several weeks while working at OpenAI, including a technical presentation running more than a thousand pages that detailed manufacturing and testing processes for multi-layer logic boards used in Apple hardware.

Apple also alleges that Liu remained in close contact with a still-employed Apple colleague, Yu-Ting "Alyssa" Peng, coaching her on how to copy files "to avoid trouble with the security team" ahead of her own move to OpenAI, which the complaint says occurred in April 2026. The two allegedly shifted their communications to a separate messaging app, LINE Messenger, a step Apple characterizes as an attempt to avoid detection.

Tan's alleged conduct centers on OpenAI's hiring process rather than direct file access. The complaint states that Tan, in his role interviewing Apple employees for positions at OpenAI, used internal Apple project code names to ask candidates about unreleased products and directed some candidates to bring physical components, described in the filing as batteries, systems-in-package, main logic boards and shields, to interviews for what OpenAI internally called "show and tell" sessions. One candidate, according to messages cited in the complaint, said he was surprised colleagues had brought Apple parts because he "didn't even know we could take those from the office." The filing also alleges that Tan retained and circulated an internal Apple document marked "Need to Know," describing security procedures for departing employees, sharing it with recruits before they gave notice.

Beyond the two named individuals, Apple's complaint alleges a broader institutional pattern at OpenAI, including instructions to candidates to prepare "Technical Deep Dive" presentations detailing proprietary Apple engineering methods, and a case in which OpenAI, through io, allegedly had a trusted Apple manufacturing partner perform a proprietary metal-finishing technique on OpenAI's behalf, while leading the partner to believe Apple had authorized the work.

Corporate and financial context

The complaint traces OpenAI's transformation from a nonprofit founded in December 2015 with a $1 billion funding commitment into what it describes as a company valued at approximately $852 billion by April 2026, up from roughly $29 billion in 2023. It states that OpenAI has raised more than $180 billion from investors and is preparing for an initial public offering while continuing to spend heavily. That financial pressure has been a recurring theme in prior coverage; OpenAI disclosed burning $2.5 billion in 2025 while projecting $8.5 billion in operating costs for 2026, alongside a stated internal target of $102 billion in advertising revenue by 2030.

Tan co-founded io Products in 2024 alongside other former senior Apple executives as what the complaint calls "the dedicated hardware vehicle for OpenAI." In May 2025, OpenAI announced its acquisition of io for approximately $6.5 billion, after which Tan became OpenAI's Chief Hardware Officer, overseeing a division the complaint says hired scores of Apple engineers. Also in 2025, OpenAI reportedly partnered with Foxconn, Apple's iPhone assembler, and engaged Luxshare and Goertek, two established Apple suppliers, for hardware components. By November 2025, OpenAI had confirmed completion of its first hardware prototypes.

Apple's complaint states that it now employs, or interacts with, over four hundred former Apple employees at OpenAI, a figure the filing offers as context for why some OpenAI personnel might retain knowledge of Apple's confidential practices. The company argues that simply employing former Apple staff does not entitle OpenAI to use their retained knowledge to accelerate its own hardware program.

According to the complaint, Apple first raised concerns with OpenAI in February 2026, writing to ask what precautions the company was taking and requesting an investigation into whether Apple's confidential information was making its way into OpenAI's business. Apple says OpenAI never responded, a silence that the complaint frames as prompting further internal investigation.

The complaint brings four claims for misappropriation of trade secrets under the federal Defend Trade Secrets Act, one against each of Liu, Tan, OpenAI and io Products, alongside two breach of contract claims against Liu and Tan individually for violating Apple's Intellectual Property Agreement, a confidentiality and nondisclosure contract that Apple requires as a condition of employment. Apple is seeking preliminary and permanent injunctions barring further use of its confidential information, an order requiring defendants to preserve evidence and return any Apple materials in their possession, damages including exemplary damages for what it characterizes as willful and malicious misappropriation, a reasonable royalty in lieu of other damage measures, and attorneys' fees under the statute. Apple has demanded a jury trial.

The complaint notes that Liu's employment contract contains an arbitration clause but carves out an exception allowing Apple to seek preliminary injunctive relief in court, which the filing states Apple intends to pursue promptly against Liu and the other defendants collectively.

Apple describes its security measures in detail across the filing: a mandatory Intellectual Property Agreement for all employees, annual "Business Conduct" training, restricted network storage access tied to work purposes only, non-disclosure agreements required of suppliers and vendors, badge-controlled physical facilities, and project-specific code names intended to limit disclosure to those with a demonstrated need to know. The complaint states that Apple discovered and fixed the authentication vulnerability that allegedly allowed Liu's access once its own investigation surfaced it, and that server logs show other users affected by the same bug do not appear to have accessed or copied Apple's confidential files.

Why this matters for the marketing and advertising community

This case sits outside PPC Land's usual coverage of paid media and platform policy, but the underlying dynamic, an AI company drawing heavily on a rival's former workforce while racing toward monetization, echoes recruiting and talent tensions that have already touched the advertising sector. OpenAI's own executives have acknowledged aggressive talent competition elsewhere in the industry. Meta reportedly offered signing bonuses as high as $100 million to poach OpenAI researchers during the buildout of its superintelligence unit, according to comments Sam Altman made about the intensity of AI talent competition.

The lawsuit also arrives against a backdrop of parallel legal exposure between the same two companies. xAI, the AI company founded by Elon Musk, filed a separate antitrust lawsuit against both Apple and OpenAI in August 2025, alleging a conspiracy to monopolize generative AI chatbot and smartphone markets, meaning Apple and OpenAI already had an adversarial legal relationship in a separate forum before this trade secret complaint was filed.

For marketers and publishers who track OpenAI as a fast-growing advertising platform, the trade secret dispute is a reminder that OpenAI's ambitions extend well past ChatGPT's chat interface and advertising business. The company's stated plan to build hardware with Jony Ive, described in the complaint as an effort to create "a completely new kind of interface that is meant for AI," was previously outlined in comments Altman made about departing from fifty years of computing paradigm assumptions. Should OpenAI succeed in shipping a consumer device, it would represent a new advertising and data surface entirely separate from the chat interface that currently carries its ad business, one this lawsuit suggests OpenAI hopes to bring to market faster than organic development would allow.

The case also illustrates a governance question that extends beyond Apple and OpenAI: how confidential information travels when senior executives move between competitors in a fast-moving industry, and what obligations, if any, follow them. Apple's complaint argues that the answer should be none, absent explicit authorization, regardless of how many other former employees a competitor has already hired.

Timeline

  • December 2015: OpenAI founded as a nonprofit with an initial $1 billion funding commitment.
  • 2024: Tang Tan and other former Apple executives co-found io Products as OpenAI's hardware development vehicle.
  • 2025: OpenAI reportedly partners with Foxconn, Apple's iPhone assembler, and engages Apple suppliers Luxshare and Goertek for components.
  • May 2025: OpenAI announces its acquisition of io Products for approximately $6.5 billion; Tan becomes OpenAI's Chief Hardware Officer.
  • November 2025: OpenAI confirms completion of its first hardware prototypes.
  • January 22, 2026: Chang Liu departs Apple to join OpenAI, allegedly without returning an Apple-issued laptop.
  • February 2026: Apple writes to OpenAI raising concerns about possible misuse of its confidential information; according to the complaint, OpenAI does not respond.
  • February 9, 2026: Liu allegedly attempts and succeeds in accessing Apple's network storage weeks after his departure, exploiting what the complaint calls a previously unknown authentication vulnerability.
  • April 2026: Yu-Ting "Alyssa" Peng, the Apple colleague Liu allegedly coached, departs Apple to join OpenAI.
  • April 2026: OpenAI's valuation reaches approximately $852 billion, according to figures cited in the complaint.
  • July 10, 2026: Apple files its complaint in the U.S. District Court for the Northern District of California, San Jose Division.

Summary

Who: Apple Inc. filed suit against former employees Chang Liu and Tang Yew Tan, along with OpenAI Foundation, OpenAI Group PBC, and io Products, LLC.

What: Apple alleges trade secret misappropriation and breach of contract, claiming the defendants stole confidential hardware engineering, manufacturing and supply chain information to benefit OpenAI's consumer device ambitions.

When: The complaint was filed July 10, 2026, covering alleged conduct beginning with Liu's departure from Apple on January 22, 2026.

Where: The case was filed in the U.S. District Court for the Northern District of California, San Jose Division.

Why: Apple says its investigation uncovered a pattern of unauthorized access, file downloads and recruiting practices designed to extract confidential information from current and former employees and from Apple's trusted manufacturing partners, conduct Apple argues has no legitimate business justification regardless of how many former Apple staff OpenAI has since hired.