AAPL Stock Unmoved After-Hours — Apple Sues OpenAI Over Alleged 'Rotten' Campaign To Steal AI Hardware Secrets

• Apple alleges OpenAI pushed departing employees to download secret files, blueprints, and prototypes to help build its own upcoming AI hardware. 
• The lawsuit highlights OpenAI’s hardware chief, Tang Tan, and a former engineer, Chang Liu, accusing them of using insider access to steal information. 
• The legal battle marks a major split between the two tech giants, who previously partnered to put ChatGPT features into Apple's Siri. 

Apple Inc. (AAPL) has sued OpenAI in a federal court in California, alleging that the artificial intelligence company orchestrated a widespread effort to steal trade secrets and hardware designs.

The lawsuit alleges that OpenAI encouraged current and former Apple workers to hand over confidential documents, blueprints, and physical components. Apple claims this misconduct was guided by OpenAI’s leadership to jump-start its own competing AI devices.

“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,” the Cupertino, California-based tech giant said in the suit. “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.” 

AAPL stock was flat after-hours at the time of writing. The stock eased on Friday but recorded its second consecutive week of gains. 

Former Executives Accused

The lawsuit focuses heavily on Tang Tan, OpenAI’s chief hardware officer. Tan previously worked at Apple for 24 years, serving as vice president of product design for the iPhone and Apple Watch. Apple claims Tan met with OpenAI months before leaving his job in early 2024 and shared secret details about Apple’s suppliers.

According to the suit, Tan and OpenAI later asked Apple job candidates to bring secret digital designs and prototypes to interviews for "show and tell sessions". More than 400 former Apple employees now work at OpenAI, including a top executive who left last month to lead its smart-glasses efforts.

The complaint also names Chang Liu, a former Apple electrical engineer who joined OpenAI in January. Apple claims Liu downloaded dozens of sensitive files about unreleased products. The lawsuit says Liu used a friend's Apple computer to bypass security and later exploited a system flaw to access files after he quit, texting his friend: "LOL, I found out I can access the [network storage], so funny."

Coached Exits And AI Devices

Apple also claims OpenAI actively taught departing workers how to hide their new jobs. This allowed them to avoid being immediately walked out of the building, giving them a standard two-week notice period to continue downloading company secrets.

The legal battle comes as Silicon Valley companies race to build new AI gadgets like smart glasses, pendants, and camera-equipped earpieces. OpenAI stepped into hardware last year when it bought io Products Inc.—a startup co-founded by Tan and former Apple design head Jony Ive—for over $6 billion.

Apple said it tried to settle the issue privately months ago, but OpenAI did not respond. Apple is asking for a jury trial, damages, and an injunction to stop OpenAI from using its technology. OpenAI did not immediately respond to requests for comment.

Fraying Partnership

The lawsuit marks the breakdown of a close relationship. Two years ago, the companies announced a partnership to put ChatGPT features into Siri and Apple Intelligence.

However, relations soured as Apple began building its own AI tools and partnering with Google, while OpenAI moved into hardware.

Before Apple filed its lawsuit, OpenAI was considering its own legal action. Reports indicated the startup was unhappy with the partnership, claiming it had not seen the expected benefits and was considering sending Apple a breach-of-contract notice.

AAPL, OpenAI: Retail View 

Retail sentiment on Stocktwits was ‘bearish’ with ‘normal’ message volumes and was ‘bullish’ with ‘high’ message volumes on OpenAI. 

“Legal headlines can create short-term volatility, but the bigger picture remains focused on innovation, competition, and long-term positioning,” one user said. 

AAPL stock has gained about 15% year-to-date.

Read More: S&P 500, Nasdaq End Week Higher Following Strong SK Hynix Debut — META, SKHVY, CRCL, BA, DAL In Focus

For updates and corrections, email newsroom[at]stocktwits[dot]com.