A Screenless Speaker And A 41-Page Complaint
Apple filed a 41-page complaint on July 10, 2026, in the US District Court for the Northern District of California, in San Jose. The defendants are OpenAI, the hardware studio io Products, and two named individuals who used to work at Apple. Apple's own language sets the tone: it accuses OpenAI of running a scheme "at every level, from members of its Technical Staff to its Chief Hardware Officer."
The two named individuals are Tang Tan, OpenAI's Chief Hardware Officer, who spent roughly 24 years at Apple and rose to vice president overseeing iPhone and Apple Watch design before leaving for io Products in 2024, and Chang Liu, a member of OpenAI's technical staff. Apple's complaint accuses Tan of emailing himself supplier information and asking job candidates to bring Apple hardware parts to meetings, and accuses Liu of downloading confidential files and teaching a colleague how to copy them.
The product at the center of the dispute is OpenAI's first hardware device, reported to be a screenless smart speaker, circular and roughly the size of a hockey puck, developed with Jony Ive's design studio LoveFrom through io Products, which OpenAI acquired for 6.4 billion dollars in May 2025. It is rumored to cost 300 to 400 dollars and ship in 2027.
OpenAI's Answer: Blame Apple's Own Locks
OpenAI filed its motion to dismiss on August 5, 2026. Its language is just as pointed as Apple's: the motion calls the complaint "rotten to its core" and says it was "plainly filed without adequate investigation and built on selectively excerpted communications and ordinary conduct stripped of context."
The core legal argument is about Apple's own security, not OpenAI's conduct. OpenAI says Apple let employees use personal iCloud accounts for work and never revoked a departed engineer's access, and that a manager reportedly stayed logged into a former employee's iCloud account to transfer files. If Apple could not keep the material secret internally, OpenAI argues, it cannot now claim the material met the legal bar for a trade secret. OpenAI adds that it has "no use, need or desire for Apple's trade secrets" and is building "something entirely new and different from anything at Apple."
Apple filed its response on August 8, 2026, calling OpenAI's conduct "repeated instances of deliberate theft." Both sides will argue their motions on October 1, 2026, in front of US District Judge Edward Davila, who took over the case in July after it was reassigned from a magistrate judge.
This Is Not Really An AI Story
Strip out the AI framing and this becomes a hiring case that could happen in any capital-intensive industry with a talent-dense rival nearby: pharmaceuticals, semiconductors, aerospace, automotive engineering. What makes it worth studying is that the two companies are simultaneously suing each other and doing business together.
The 400-employee, 40-letter split is the real story. It shows how ordinary cross-hiring has become in a tight, high-pay technical labor market, and how one lawsuit can turn years of routine recruiting into a discovery process that reaches dozens of people who never expected to be pulled into litigation.
The case also shows the two cheapest defenses available to a company that hires from a rival: point to the plaintiff's own lax access controls, and show the new work is different enough that the old secrets could not have been used. Both defenses only work if you documented them before anyone sued, not after. European employers should not treat this as a US-only risk either: the EU Trade Secrets Directive creates comparable exposure for any company that recruits staff carrying a competitor's confidential information, so the same habits apply on this side of the Atlantic.
Four Moves Before You Hire From A Rival
Put three habits in place before you extend an offer to a competitor's engineer. Revoke every departing employee's access to internal systems and cloud accounts on their last day, and audit that it actually happened; Apple's failure to do exactly this is now central to OpenAI's defense. Tell new hires in writing not to bring a former employer's confidential materials, code names, or hardware to interviews or their new desk, and keep the signed acknowledgment on file.
Document the technical difference between a new hire's old job and their new one, because "we are building something different" is only a defense if you can prove it later. And do not assume an ongoing commercial relationship with the company you are hiring from will shield you once litigation starts: Apple and OpenAI are proof that a partnership and a lawsuit can run on parallel tracks.
Read next: Apple Says OpenAI Hired Away Its Hardware Secrets | Dropping the Name Did Not End the Lawsuit
