Apple filed a federal lawsuit against OpenAI and three of its current employees on Friday, alleging systematic theft of trade secrets related to Apple's hardware design methodologies, manufacturing processes, and supply chain optimization techniques. The suit claims OpenAI's emerging hardware division built its operations by poaching Apple's institutional knowledge through departing employees who allegedly violated non-disclosure agreements.
The complaint names three former Apple engineers now working at OpenAI, asserting they transferred proprietary documentation and strategic frameworks central to Apple's hardware competitiveness. Apple argues OpenAI's hardware business is structurally compromised by the stolen intellectual property, particularly as the company pivots beyond large language models into physical devices.
The lawsuit targets OpenAI's recent hardware ambitions, which include developing custom chips and manufacturing partnerships. Apple contends that OpenAI gained unfair competitive advantage by acquiring Apple's detailed playbooks for vendor relationships, production scaling, and cost optimization. The company used the phrase "rotten to its core" to describe OpenAI's hardware operation in court filings.
This action escalates tensions between Silicon Valley heavyweights as OpenAI expands beyond AI software into devices. Apple has aggressively protected its hardware secrets, given the iPhone's centrality to its business model and the company's reliance on manufacturing sophistication as a moat against competitors.
The lawsuit seeks damages, injunctive relief preventing further use of stolen trade secrets, and potentially criminal referrals. OpenAI has not yet responded publicly to the claims. The case adds to broader industry friction over employee mobility and knowledge transfer as AI companies rapidly scale their workforces and venture into new product categories.