Apple has sued OpenAI in federal court, saying two of its former employees stole secret information and brought it to OpenAI to help develop a competing smartphone.

One of those former employees is Tang Tan, who worked at Apple for 24 years and led the design team for iPhones and Apple Watches. Apple says Tan used Apple's secret internal project names when recruiting people for OpenAI, asked job candidates to bring actual Apple hardware components to interviews, and asked people about products Apple hasn't announced yet.

The other employee is Chang Liu, who worked on hardware engineering at Apple for eight years. Apple says Liu took his company laptop when he left for OpenAI, used it to download Apple's confidential technical documents, and shared those files with other Apple employees who were considering applying to OpenAI.

Apple sent OpenAI a warning letter in February 2026 asking it to stop. When OpenAI didn't respond, Apple went to court. The complaint describes this as a pattern of behavior, not just a few mistakes.

Apple also alleges that OpenAI used one of Apple's special metal finishing techniques — a manufacturing process — after misleading a factory partner into thinking Apple had approved it.

Jony Ive's startup io, which OpenAI bought for $6.5 billion in May 2025, is mentioned in the lawsuit, though Ive himself is not.

Why this matters now

OpenAI is working on its first hardware product: a smartphone powered by AI. Unlike a regular iPhone where you tap apps, this device would let AI do tasks directly for you. This would be a direct competitor to Apple's iPhone.

That's why this lawsuit is bigger than a typical dispute between companies over a departing employee. Hardware companies always fight over departing workers and secret designs — component suppliers, how phones are built, and manufacturing partnerships are guarded as carefully as any computer code. The difference here is that OpenAI is not a small startup. It has the money, the computing power, and now the talent to genuinely challenge Apple's core product.

Apple did not include Jony Ive's name in the lawsuit, even though it named his company io. This suggests Apple is focused on proving that Tan and Liu broke the law through their specific actions, rather than claiming the entire io project or OpenAI's hardware strategy is built on theft. That's a more straightforward legal argument to make in court.

The broader context is a question both companies are asking: what comes next in how people interact with computers. Apple has spent 20 years perfecting the touchscreen phone with apps that you tap. OpenAI thinks the future is different — a phone that uses AI to understand what you want and does it automatically. This lawsuit won't decide that question, but court documents may eventually show how far OpenAI's smartphone project has actually gotten.

For now, OpenAI hasn't publicly responded. The next step in court will tell us how serious this case is and whether we'll learn more about OpenAI's hardware plans in the coming months.