OpenAI blames Apple's offboarding in trade secrets fight

OpenAI's defense against Apple's trade secrets suit rests on an awkward detail. It says an authentication mishap let iPhone engineer Chang Liu keep reaching Apple material after he joined OpenAI in January, and that Apple staff kept asking him for help finding files. On Wednesday, U.S. District Judge Edward Davila in San Jose hears both Apple's injunction request and OpenAI's bid to have the case thrown out, as reported by Rswebsols.

At a glance

• Apple sued in July, accusing OpenAI, its hardware chief and former iPhone engineer Liu of conspiring to extract design, manufacturing, component, testing and supply chain secrets to help OpenAI build consumer hardware.
• The judge has two motions in front of him. Apple wants a preliminary injunction that bars OpenAI from using the allegedly taken material while the case runs, and OpenAI wants the whole lawsuit dismissed.
• OpenAI says Apple lists only broad categories of hardware information and never names specific secrets. Apple answers that the files in Liu's iCloud account are separate from its core claim about downloads from its network storage.

If you have not followed the feud, here is the short version. Apple and OpenAI partnered in 2024 to build ChatGPT into the iPhone. Relations cooled after OpenAI moved into hardware by buying Jony Ive's io Products. In May, according to CNN, Bloomberg reported that OpenAI was considering legal action of its own over claims that Apple had not integrated and promoted its products enough.

Apple says Liu used an authentication bug on February 9 to reach its network storage

The case is Apple v. Liu, 5:26-cv-07078, in the Northern District of California. It names OpenAI, its hardware chief Tang Tan and Liu, and Apple claims that io operates as an alter ego of OpenAI. Jony Ive is not a defendant. According to Open Class Actions, the suit brings claims under the federal Defend Trade Secrets Act, plus breach-of-contract claims against the two former Apple employees.

Open Class Actions also reports that both men signed Apple's Intellectual Property Agreement. Apple says that agreement's confidentiality and return-of-property duties still apply after an employee leaves. The central allegation is about Liu. Apple says he left in January 2026 and never returned at least one Apple-issued laptop. On or around February 9, 2026, Apple says, he found that a then-unknown authentication bug still gave him access to its cloud-based network storage, and he used it instead of reporting it.

Apple says OpenAI asked candidates to bring "actual parts" to interviews

The second part of the case is about hiring. Apple says OpenAI used interviews with its current and former staff to pull out proprietary information, and that OpenAI executives told candidates to bring prototypes and other "design artifacts". Tang Tan allegedly asked candidates who still worked at Apple to bring "actual parts" for "show and tell" sessions. Apple also says OpenAI coached departing employees on how to get around security processes.

According to CNBC, Apple also alleges that OpenAI asked hardware firms to use a metal finishing technique Apple invented, and misled one partner into thinking Apple had given permission. The complaint says OpenAI is using this insider information to "catalyze its ventures into the consumer hardware marketplace."

OpenAI says the lawsuit exposes Apple's own offboarding gaps

OpenAI denies all of it. Spokesperson Drew Pusateri said the company has "no interest in other companies' trade secrets". Its lawyers say Apple is portraying "routine job interviews as acts of trade secret theft" to stop employees from moving to rivals. In an October filing, OpenAI said it is building a new range of devices for the AI era and has neither the need nor the desire for Apple's information.

The motion to dismiss argues that Apple describes only broad categories of hardware information and never identifies a specific secret. It also turns the accusation back on Apple. According to OpenAI, Apple encouraged staff to use personal iCloud accounts for work, and an authentication mishap left Liu with access to sensitive material after he had left.

OpenAI says Apple employees kept opening content in Liu's personal iCloud account after he left, and asked him to find files and answer technical questions. In August it published excerpts of those messages about his past projects. Apple replies that the iCloud material is "distinct" from its main claim, which is about the network storage downloads.

Davila ordered OpenAI on Tuesday to hand over documents faster

On Tuesday, Davila ordered OpenAI to speed up producing documents related to the alleged misappropriation that could help its upcoming hardware. According to Bloomberg News, OpenAI's first consumer device will be a doughnut-shaped smart speaker expected to sell for more than $300. People inside the company describe it as an AI-focused product, unlike anything Apple plans to release.

The two motions ask different questions. A preliminary injunction is a temporary court order issued before any verdict. If Davila grants it, OpenAI must stop using any confidential material allegedly taken from Apple and stop trying to get more, and the order stays in place while the case continues. Think of a disputed bicycle chained to a rail until a court decides who owns it.

A motion to dismiss asks something narrower: whether the complaint, read as written, describes a claim specific enough to go forward. Neither side has to prove anything at this stage. OpenAI's argument that Apple names only broad categories is aimed squarely at that test.

The inputs leave out the central evidence: which files Liu allegedly downloaded through the authentication bug, and what was in them. Oddly, much of OpenAI's defense is built on Apple's own housekeeping, from employees using personal iCloud for work to the access Liu kept after leaving. If Apple can keep that material separate from the network storage claim, as it is trying to, OpenAI's version will likely carry less weight.

What Davila's two rulings decide

No date has been given for Davila's ruling on either motion. If he grants the injunction, it stays in force for as long as the litigation runs. According to CNN, the suit could complicate OpenAI's plans for a highly anticipated IPO and disrupt the expected unveiling of its device later this year. OpenAI is aiming for a $1.4 trillion valuation ahead of that offering, while a wave of Apple employees has been moving to OpenAI.