Apple has filed a lawsuit against OpenAI concerning alleged theft of trade secrets and potential misappropriation of its proprietary technology. The complaint was lodged on July 10, 2026, in a federal court located in Northern California.
The legal action presents a significant threat to OpenAI’s hardware development plans and its reported trajectory toward an Initial Public Offering (IPO), especially given that the AI company is reportedly considering going public as early as late 2026.
According to the lawsuit, Apple alleges a systematic effort by OpenAI to build its consumer hardware business by poaching talent and stealing confidential information from Apple. The allegations span several key areas of alleged misconduct.
A central accusation involves high-level involvement, naming Tang Tan, OpenAI’s Chief Hardware Officer. Tan is identified as a former Apple executive who spent 24 years at the company and contributed significantly to designing products like the iPhone and Apple Watch. He is accused of instructing interviews for Apple employees to bring unreleased parts, CAD design files, and prototype units.
The complaint further details claims of systematic poaching, stating that more than 400 former Apple employees now work at OpenAI. Apple contends this large number is not coincidental, asserting that the recruitment process itself was used as a mechanism to extract confidential information.
Furthermore, OpenAI is accused of coaching departing Apple employees on circumventing corporate security checks. The suit mentions internal materials allegedly instructing employees on how to bypass standard exit processes, alongside reports of a former senior systems electronics engineer claiming continued access to company storage in an alleged message calling it “hilarious”.
The lawsuit also targets io, a design firm founded by Jony Ive that was acquired by OpenAI in 2025. This entity is accused of misusing Apple’s proprietary metal finishing techniques and using internal Apple terminology and information regarding proprietary battery and power components when contacting suppliers.
These legal claims introduce significant legal and reputational uncertainty for OpenAI, directly impacting its strategic objectives.
Regarding hardware ambitions, Apple’s lawsuit asserts that OpenAI’s entire hardware business is “compromised” due to misappropriated trade secrets. The action specifically seeks an injunction intended to halt OpenAI from utilizing Apple’s confidential information and to compel a redesign of unreleased products, thereby directly threatening the debut of OpenAI’s first hardware devices.
The litigation complicates OpenAI’s IPO timeline and valuation prospects. Investors and underwriters are reportedly showing increased caution due to the lawsuit. Previously, while OpenAI aimed for $1 trillion valuation—a target CEO Sam Altman termed a “nonstarter”—advisors had given Altman two paths: accept a lower valuation for a 2026 IPO or defer until 2027 to reach the higher valuation.
The filing adds substantial risk that could make securing the high valuation more challenging and potentially delay any planned IPO further.
In response, OpenAI has stated that it takes the allegations seriously but has not observed evidence supporting them. The company is also defending its right to fair competition and employee mobility, pushing back against Apple’s claims.
The lawsuit marks a major escalation in tensions between the two companies, despite their previous partnership in 2024 for integrating ChatGPT into Apple products. The case additionally highlights a wider industry concern regarding how much trust AI firms should receive concerning data security.