Apple sues OpenAI over alleged hardware trade secret theft
Apple has filed a federal lawsuit accusing OpenAI of misappropriating its hardware trade secrets through former Apple employees, a move that could complicate OpenAI's upcoming IPO and hardware plans.
Apple filed a 41-page complaint in a Northern California federal court alleging that three former Apple employees who joined OpenAI stole confidential information about the tech giant's hardware operations. The suit claims the former Apple Watch vice president, Tang Tan, former iPhone systems engineer Chang Liu, and former Apple staffer Yu-Ting “Alyssa” Peng used their positions to extract trade secrets and share them with OpenAI, which is preparing to launch its first AI-focused hardware device.
OpenAI has not responded to requests for comment. The company is currently preparing an initial public offering after submitting a confidential registration statement to regulators and is focusing on enterprise and coding services while investing in hardware development following its $6.5 billion acquisition of Jony Ive’s design firm, io.
"It’s never fantastic to get sued by Apple when you’re trying to IPO," said Avery Williams, co-chair of the trade-secret practice at McKool Smith. "Apple is a tenacious litigant … they do not tend to back down."
Legal analysts expect the case to be lengthy. Alex Terepka, founding partner of Watstein Terepka LLP, said the dispute is likely to involve extensive discovery and could last for years. Other experts noted that while the allegations are serious, they are not unusual in Silicon Valley, where trade-secret lawsuits are common.
"The next frontier is going to be AI hardware, more than just chips … robotics and other types of physical AI is the next area that is ripe for disruption," said Charlyn Ho, CEO of Rikka Law Group.
The lawsuit arrives amid a broader wave of litigation facing AI firms, including copyright claims from publishers and other trade-secret disputes involving former employees moving between rival companies.