Apple lawsuit clouds OpenAI device plans and IPO hopes

2026-07-11

Apple's lawsuit against OpenAI on the 10th has deepened uncertainty over the US startup's artificial intelligence device development and initial public offering plans. Apple says former executives took confidential information and used it in OpenAI's device work.

Claims over confidential data

Apple sued OpenAI and two former employees involved in its device development in a federal court in California over alleged trade secret theft and other claims. Apple said it had found 'decisive evidence' that confidential information was improperly taken.

OpenAI has pushed back, saying it has 'no interest whatsoever in any other company's trade secrets.' The complaint names former Apple executive Tang Tan, who spent more than 20 years at Apple and served as vice president in charge of product design including the iPhone, as the central figure in the misconduct.

Impact on device development

After leaving Apple, Tan took charge of OpenAI's device unit after the company acquired io Products in 2025, a startup he co-founded with former Apple designer Jony Ive and others. According to the complaint, Tan and others instructed Apple employees who came for OpenAI job interviews to take prototypes and parts from inside the company.

They also allegedly handed out a guide for successful candidates outlining steps to make it less likely that taking confidential information at the time of departure would be detected. Apple further claims they approached one of its suppliers that handled special metal processing and told it they had 'Apple's permission' to apply the same processing to OpenAI products.

For the other former employee named in the lawsuit, Apple said he continued to access the company's systems without authorization after leaving and took confidential information, while also obtaining design drawings and other materials for products under development through a longtime Apple employee.

IPO plans also affected

Since releasing the conversational AI ChatGPT in 2022, OpenAI has worked with Ive on developing innovative devices suited to AI use. It has invested heavily in acquisitions and hiring, but the planned product launch originally targeted for 2026 could be delayed.

To prepare for its first hardware development effort, OpenAI has been recruiting outside talent. It has also poached staff from Apple, which is known for product development and secrecy, and Apple says more than 400 former employees are now at OpenAI.

In its complaint, Apple said it is seeking damages as well as an injunction to stop OpenAI's device development. If the case goes to court, evidence disclosure could reveal whether wrongdoing occurred. For OpenAI, which filed for an initial public offering in June, the burden will grow further as it faces copyright infringement litigation and lawsuits over incidents involving ChatGPT.

In June 2024, OpenAI CEO Sam Altman was invited to an event at Apple's headquarters and watched the announcement of ChatGPT integration on iPhone from the audience. The relationship with the once-friendly tech giant is set to be shaken sharply by this lawsuit.

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