Apple sues OpenAI over alleged trade-secret theft by Tang Yew Tan and Chang Liu

Apple has filed a lawsuit against OpenAI alleging trade-secret theft, targeting both former Apple employee Chang Liu and OpenAI Chief Hardware Officer Tang Yew Tan. Apple claims their work involved confidential Apple materials being brought to OpenAI, and that OpenAI employees and recruiters, in some cases, were told how to avoid scrutiny.

This is not a vague “talent poaching” dispute. Apple’s complaint describes specific alleged behavior, including that Liu allegedly failed to follow confidentiality procedures after leaving Apple, such as returning his Apple-issued laptop, and then allegedly used that laptop to access Apple’s internal network. Apple also says Liu “celebrated his improper access,” sending messages of “LOL” and “so funny” to a colleague, and further accuses him of training another Apple employee he was recruiting for OpenAI to copy confidential files while “avoid trouble from the security team.”

If you are an executive, the headline risk here is obvious: when you connect employees to a new employer, trade secrets can become a moving target. The lawsuit also puts a spotlight on what happens between signing a job offer and day one at a desk. Apple’s allegations extend beyond Liu, though, and that is where the board-level stakes get sharper. Apple accuses OpenAI of “methodically using Apple’s confidential information to benefit OpenAI,” specifically tied to Tang Yew Tan, described in the filing as OpenAI’s Chief Hardware Officer, a former Vice President of Product Design for iPhone and Apple Watch who spent 24 years at Apple.

Apple’s theory is that the conduct is part of a larger pattern. The suit alleges that OpenAI recruited Apple employees with instructions to bring prototypes to interviews, and that it also provided guidance on how to avoid scrutiny. Apple goes further and accuses OpenAI of distributing “Apple’s internal departure procedures” to Apple employees before they announce their departures, which it argues helps those departures avoid scrutiny. In Apple’s telling, this is not just one bad actor. It is “the tip of the iceberg,” according to the lawsuit.

Apple also includes a broader narrative about how information moves when teams are dispersed, timelines are compressed, and oversight is supposed to be internal. The complaint points to multiple allegedly coordinated elements: OpenAI employees using Apple’s internal project code names in interviews, asking candidates about confidential Apple projects, directing them to bring Apple parts and prototypes, celebrating and doing nothing to stop prohibited access to confidential Apple data and repositories, and communicating over private platforms to avoid detection. Even if the allegations are contested in court, the structure of the claims is a checklist of what IP-conscious companies worry about: knowledge transfer that is operationalized through recruiting, interview prep, device handling, code names, and communication channels.

For context, this is arriving in a moment when OpenAI is already facing a stack of legal pressure over other kinds of intellectual property claims. The source notes that OpenAI is currently embroiled in several copyright infringement lawsuits, including from The New York Times, Ziff Davis, various record labels, artists, authors, and many more. Layer in a trade-secret dispute and you get a company whose “how it learns and how it builds” is being argued on multiple legal fronts at once. For decision-makers, the second-order implication is not just the case itself. It is how boards think about risk surfaces when a company expands from software into deeper hardware involvement, where prototypes, design workflows, and internal product roadmaps are the lifeblood.

OpenAI’s hardware push is part of why this case feels like it matters beyond a typical HR conflict. The source says OpenAI has been looking to get into the hardware space for some time, including last year acquiring former Apple designer Jony Ive’s firm, io, for $6.5 billion. The promised hardware has yet to materialize. The source also mentions a rumor about a smartphone that uses hallucinating agents instead of apps. Whether or not that rumored product path ever launches, the lawsuit highlights a practical reality: hardware is a physical and information-heavy domain. It is where prototypes, internal design decisions, and engineering artifacts can become trade secrets in a more literal, harder-to-audit form.

There is also a reputational and cultural subplot. The source frames the situation as “I learned it from you,” connecting it to a Steve Jobs-related Picasso quote lineage and the aphorism: “Good artists copy; great artists steal.” The legal system will not grade you on quotes. But the analogy underscores the industry tension: in fast-moving technology, copying can be framed as inspiration, while trade-secret theft is treated as something far more serious. Apple is telling the court it believes the line was crossed, and that the conduct was knowing and deliberate, not accidental.

For executives at companies hiring aggressively, the practical takeaway is that talent acquisition can become compliance theater if it is not built on process. If you are a board member, this is the kind of case that turns abstract “IP policy” into concrete questions: What do recruiters and engineers do with prototypes? What training exists for recruits about handling confidential information? What communications are expected or forbidden? And when a company expands into hardware, does its internal governance scale quickly enough? The lawsuit puts OpenAI’s recruiting and hardware ambition under a microscope. It should also put every hiring-heavy organization’s safeguards under review, because the risk does not wait politely for litigation to begin.