Apple sues OpenAI over $6.4bn hardware trade secrets battle

Apple has filed a lawsuit in California federal court against OpenAI and two of its former senior executives, accusing them of misappropriating trade secrets to accelerate OpenAI’s entry into consumer hardware.

The suit targets Tang Tan, Apple’s former vice president of product design for iPhone and Apple Watch, now OpenAI’s Chief Hardware Officer, and a former senior systems electrical engineer.

The lawsuit alleges that departing Apple employees were induced to bypass security protocols, extend internal access privileges, and leak unreleased product information to replicate Apple’s decades of hardware R&D.

Apple is demanding that OpenAI cease infringement, destroy proprietary materials, and redesign unreleased products, while also requesting a jury trial.

The dispute comes after OpenAI’s US$6.4 billion acquisition of IO Products, a move that formally positioned the AI company in consumer hardware, directly encroaching on Apple’s core territory. Relations between the two firms, once close partners, have soured rapidly.

Apple has already confirmed that its new Siri, due this autumn, will drop ChatGPT integration in favour of Google’s Gemini AI model.

Industry analysts say the lawsuit underscores how competition in the global AI sector has shifted from algorithms and ecosystem partnerships to intellectual property battles over hardware technology.

Hardware R&D, supply chain expertise, and industrial design, Apple’s long-standing strengths, are now the most urgent gaps OpenAI must fill to achieve a breakthrough in AI devices such as smart glasses and wearables.

For Apple, the lawsuit is both a defensive move to protect its technological moats and a strategic strike to suppress a rising competitor on the eve of the AI hardware boom.

For OpenAI, preparing for an IPO, the case threatens to disrupt its R&D pipeline, delay product launches, and cast doubt on the legitimacy of its hardware business.

In the long run, the case signals that AI hardware competition has entered a deep compliance and intellectual property phase, where technological accumulation and patent barriers will serve as decisive moats.

The era of rapid breakthroughs through talent poaching is narrowing, raising the barrier to entry for new players in the AI hardware race.