Apple has filed a blockbuster lawsuit accusing OpenAI and io Products of stealing Apple hardware trade secrets, and it names two specific people at the center of the allegations. In a 41-page complaint filed in the Northern District of California court on Friday, Apple says OpenAI and its hardware operation misappropriated confidential data, including information about unreleased hardware products, technical specifications, and even details about Apple’s vendors and contractors in its supply chain.

Apple’s complaint claims this is not a vague “someone might have seen something” dispute. It says the alleged theft was coordinated across roles, “At every level, from members of its Technical Staff to its Chief Hardware Officer, and in coordination with business partners,” and that “OpenAI's nascent hardware business now rests on the shakiest of foundations, rotten to its core by its illegal reliance on misappropriated trade secrets.” OpenAI denies the core accusation in a statement to Fortune, saying it “have no interest in other companies' trade secrets” and that it remains focused on “building innovative technology that empowers people everywhere.”

The defendants are not just OpenAI as a company. Apple also listed io Products as a defendant. io Products is a hardware design firm acquired by OpenAI last year, co-founded by Jony Ive, Apple’s former design boss. Ive is not named in the lawsuit, but his company is now pulled directly into the legal fight over the credibility and origins of OpenAI’s hardware ambitions. Apple’s suit seeks injunctive relief, monetary damages, and declaratory judgments to stop the alleged theft. For decision-makers, that mix matters. Injunctive relief can disrupt roadmaps fast, while monetary and declaratory remedies turn this into a long-running question of who really owns what knowledge.

At the personal level, Apple accuses Tang Tan, OpenAI’s chief hardware officer and a former Apple vice president, of systematically stealing secrets. Apple says Tan used confidential Apple codenames during OpenAI’s recruiting process, encouraged interviewers to share secrets from Apple, and directed them to physically bring Apple hardware parts into interviews. Tan left Apple to join io Products in 2024 after roughly 24 years at the company, moving from product designer to vice president over iPhone and Apple Watch product design.

Apple’s other named target is Chang Liu, described as a member of OpenAI’s technical staff. The complaint alleges Liu downloaded dozens of confidential hardware files, including technical specifications, engineering presentations, and proprietary data for unreleased products. Apple also alleges Liu instructed an Apple employee on how to bypass security teams when copying files. In addition, Apple accuses OpenAI of misappropriating knowledge of Apple’s supplier relationships and proprietary terminology to approach Apple’s supply chain partners. This is the part executives should watch closely: supply chain knowledge is often harder to recreate than engineering data, because it can reflect relationships, timing, and practical constraints that take years to build.

If this sounds like a clash over “how to make hardware,” that is only half the story. The other half is why Apple is choosing to escalate now. The lawsuit lands as Apple, OpenAI, and the broader AI hardware ecosystem are shifting in real time. Apple has a reputation for fiercely safeguarding product secrecy, and the company is described as preparing to release a new class of hardware products shaped in large part by Apple’s former design boss. Meanwhile, OpenAI has been developing hardware devices to run ChatGPT, part of a strategy to control physical products rather than rely on giants like Apple.

The lawsuit also arrives after signs of partnership fragmentation. The Apple-OpenAI collaboration that brought ChatGPT into Apple software platforms and supported Apple’s Siri digital assistant faded over time. In January, Apple announced it was turning to Google for its Apple Intelligence efforts. An Apple spokeswoman added that Apple teams “are constantly developing breakthrough technologies to create the best products and services in the world, and protecting their work and intellectual property is something we take very seriously.” OpenAI repeats the denial, saying it has no interest in other companies’ trade secrets and emphasizing innovation.

Beyond the headline legal fight, the timing stacks up with two bigger corporate pressures. First, OpenAI is building a hardware strategy fast, and it reportedly recruited from Apple, including hiring top product leaders. In May 2025, OpenAI announced it was buying Ive’s io Products for $6.4 billion. Second, both companies are in leadership and capital moments. Apple CEO Tim Cook is due to hand the reins to John Ternus in September. OpenAI is preparing for an initial public offering as it faces increasing competition from other AI model makers like Anthropic and Google. For a board, a lawsuit like this is not just about liability, it is about disclosure risk, partner confidence, and how future product launches might be constrained by courtroom timelines.

This is also not the first legal heat OpenAI has faced around IP and information flows. In 2023, the New York Times sued OpenAI and Microsoft, alleging the companies used its articles and other content to train AI models without permission. And in June, a California judge dismissed a lawsuit from xAI, the company run by Elon Musk, alleging OpenAI recruited a former xAI engineer to share information about the Grok chatbot. Put together, the pattern suggests that as AI companies expand beyond software into hardware and distribution, the IP boundary lines become a board-level problem, not just a legal one.

The strategic stake for executives across tech is straightforward: when you build a new category, you do not just need talent and capital. You also need a defensible story about where your knowledge came from, and you need partners like suppliers to stay willing to work with you. Apple’s allegations suggest it believes OpenAI’s hardware push is grounded in misappropriated Apple know-how. Even if OpenAI prevails, the dispute can still reshape hiring, recruiting processes, information security, and how hardware ventures are validated by the ecosystem that makes them real.