The biggest bombshells from Apple's trade secret lawsuit against OpenAI

• Apple has filed suit against OpenAI, alleging the AI giant stole trade secrets.
• In a filing, Apple says employees who went to OpenAI had access to its systems after leaving.
• Apple argues that OpenAI's hardware business is "rotten to its core" and built on stolen secrets.

Apple's new lawsuit against OpenAI reads less like a routine trade-secret complaint and more like a play-by-play of how the iPhone maker says its rival built its consumer hardware ambitions.

Filed Friday, the suit accuses OpenAI of "a coordinated pattern of misconduct at an institutional level," including everything from exploiting a security bug to recruiting Apple engineers for "show and tell" interview sessions involving confidential hardware.

Here are the biggest allegations.

OpenAI allegedly exploited an Apple security bug

According to the complaint, Apple's investigation began after former employee Chang Liu left for OpenAI in January. Apple alleges Liu failed to return a company laptop and later discovered he could still access Apple's internal systems because of what the company describes as an authentication bug.

Rather than reporting the issue, Apple said that Liu downloaded dozens of confidential engineering files while working at OpenAI, including documents related to unreleased products, technical specifications, presentations, and manufacturing processes.

Apple also alleges Liu encouraged another Apple engineer who was interviewing at OpenAI to study confidential Apple materials ahead of her interviews and advised her how to avoid attracting attention from Apple's security team while copying files. The complaint says that the two moved conversations to a private messaging app to avoid detection.

Apple says OpenAI turned interviews into intelligence-gathering sessions

Apple also accuses OpenAI of systematically using its job recruitment process to obtain trade secrets. The buzzy AI company, which has filed the initial paperwork in a lead-up to an initial public offering, has become one of the most in-demand employers in tech. Amid the influx of talent, several hardware engineers at Apple have decamped to the AI juggernaut.

The lawsuit claims that Chief Hardware Officer Tang Tan, a former Apple vice president who spent 24 years at the company, asked Apple job candidates to bring physical components for "show and tell" sessions during interviews. OpenAI employees would also ask candidates for prototypes and information about vendors, the complaint alleges.

One then-Apple employee screenshotted and downloaded files from a "highly confidential Apple project," the lawsuit says, alleging that Tan later asked about that project during the interview.

"OpenAI's recruiting practices suggest it hires these individuals at least in part because of the confidential Apple-specific knowledge and expertise they have and could improperly obtain," the complaint says.

Apple says the misconduct went all the way to OpenAI leadership

Apple says it raised its concerns with OpenAI earlier this year and asked the company to investigate whether Apple's confidential information had entered its business.

According to the complaint, OpenAI never responded, prompting Apple to continue its investigation before filing suit on Friday.

"This is the tip of the iceberg," the complaint reads. "Apple lacks visibility into what's been happening behind closed doors at OpenAI, where such misconduct is normalized and exemplified by leadership."

"This much is clear, however: at every level, from members of its Technical Staff to its Chief Hardware Officer, and in coordination with business partners, OpenAI has been stealing Apple's trade secrets and confidential information," the complaint continued. "As a natural result, OpenAI's nascent hardware business now rests on the shakiest of foundations, rotten to its core by its illegal reliance on misappropriated trade secrets."

Apple said it is "left with no choice" but to seek damages in an amount to be determined at trial, and court orders preventing OpenAI and the individual defendants from possessing or using Apple's trade secrets.

The suit marks a dramatic escalation in what had been one of Silicon Valley's highest-profile AI partnerships, following Apple's integration of ChatGPT into Apple Intelligence in 2024. The relationship has frayed as OpenAI ramped up its own consumer hardware ambitions by hiring former Apple executives and engineers.

OpenAI and Apple did not immediately respond to requests for comment from Business Insider.