Apple on Friday accused OpenAI of misappropriating trade secrets as the artificial intelligence company moves forward with plans to develop its own hardware for ChatGPT, marking a significant breakdown in relations between the longtime partners.

In a lawsuit filed in federal court in California, Apple alleges that OpenAI encouraged Apple employees it was attempting to hire to share confidential company information, and even advised them on how to avoid detection during the transition.

“This case is about Apple’s former employees stealing Apple’s trade secrets for the benefit of OpenAI,” the complaint states. “Apple brings this suit to put a stop to it.”

Two former Apple staff members who now work at OpenAI are named as defendants. One is Tang Tan, a key figure in the design of the iPhone, Apple Watch and iPod, who currently serves as OpenAI’s chief hardware officer. The other is Chang Liu, a former Apple electrical engineer whom the company says was entrusted with highly sensitive product development initiatives before departing earlier this year to join OpenAI.

OpenAI said it is reviewing the allegations. In a statement released Friday, spokesperson Drew Pusateri said the company has “no interest in other companies’ trade secrets” and remains focused on developing technology designed to benefit users worldwide.

The suit accuses OpenAI of seeking shortcuts on hardware

OpenAI has not publicly detailed the specific type of device it is building, but it has described the project as an attempt to create a new way for people to interact with artificial intelligence beyond traditional screens and interfaces. The initiative reflects a broader industry effort to give AI a tangible presence, reminiscent of the introduction of voice-activated smart speakers into homes years ago.

According to Apple’s lawsuit, OpenAI’s hardware ambitions rely in part on improperly obtained knowledge.

“OpenAI’s nascent hardware business now rests on the shakiest of foundations, rotten to its core by its illegal reliance on misappropriated trade secrets,” the filing alleges.

Apple said it launched an internal investigation after suspecting that confidential information may have been exposed. The company claims it uncovered what it describes as a pattern of trade secret theft involving former employees who later accepted roles at OpenAI.

The complaint asserts that both Liu and Tan accessed sensitive Apple documents while employed at OpenAI. Apple alleges that Liu downloaded multiple confidential hardware files onto an Apple-issued device he retained after leaving the company. It also claims Tan instructed job candidates who were still employed at Apple to bring “actual parts” from Apple products to interviews at OpenAI.

Apple said it contacted OpenAI in February to raise concerns during the early stages of its investigation, but maintains that it received no response.

An Apple spokesperson stated Friday that the company will “always defend our teams’ hard work and innovations” and is taking appropriate legal action.

A partnership with Apple has edged toward rivalry

Several years ago, Apple turned to OpenAI for assistance as it worked to catch up in the artificial intelligence race following the rapid rise of ChatGPT. In 2024, the companies formed a partnership that integrated ChatGPT into the iPhone as an AI-driven “answer engine” to support Siri when the built-in assistant could not meet user requests. Since then, however, the relationship has grown more competitive.

As part of its hardware expansion, OpenAI recruited former Apple design leader Jony Ive to oversee development of an AI-powered device that industry observers believe could one day compete directly with Apple’s own products.

Last year, OpenAI revealed it was collaborating with Ive on a confidential hardware initiative aimed at reimagining how users communicate with artificial intelligence. In connection with that effort, OpenAI acquired io Products, a product and engineering company co-founded by Ive, Tan and others, in a deal reportedly valued at nearly $6.5 billion.

Apple’s lawsuit also names io Products as a defendant.

The legal action comes as OpenAI evaluates a potential public offering and faces intensifying competition from other AI developers. Earlier this year, the company narrowed some of its business initiatives to concentrate on ChatGPT, while continuing to advance its hardware plans.

OpenAI’s chief financial officer, Sarah Friar, said in April that the company expects to introduce a consumer hardware product toward the end of the year.