Apple sues OpenAI in anger: 400+ people were poached; the full 41-page complaint is packed with evidence

Author: bootly, BitpushNews

A 41-page lawsuit, 400-plus employees jumping ship, and a chat log saying “Haha, that’s so hilarious”—all treated as ironclad evidence—Apple and OpenAI are tearing into each other in court.

The “biggest AI scandal of the year” is here!

On the afternoon of July 10 local time, Apple filed a lawsuit in court against OpenAI, accusing the AI giant of “systematically stealing trade secrets.”

In a 41-page complaint with no shortage of sharp wording—Apple even used a highly lethal metaphor, saying OpenAI’s hardware business has “rotted to its core.”

Apple also warned that the disclosed details of the allegations are just the tip of the iceberg, and as the investigation goes deeper, more shocking revelations will come to light.

You have to know that just two years ago, these two companies were still “close” allies. Apple integrated ChatGPT into the iPhone, while OpenAI gained the largest hardware gateway in the world. No one expected this partnership—once viewed as a “win-win”—to end in such an undignified way.

The core storm: two Chinese-descended engineers? Poaching more than 400 Apple employees? Details are astonishing!

On the surface, this case is about Apple and OpenAI. But at the center of the storm are two names: Tang Yew Tan (Chen Tangyu) and Chang Liu (Liu Chang).

Tang Yew Tan (Chen Tangyu)‘s background can be called a “top-tier genius” pedigree. Born in Malaysia, he completed middle school education at La Salle Klang before going to Singapore for A Levels. He then entered Imperial College London to study mechanical engineering, and later went to the Massachusetts Institute of Technology (MIT) to obtain a master’s degree in mechanical engineering.

In March 1999, Tan joined Apple, kicking off a 25-year career. From the first-generation iPod to the Apple AirPort, and then to later iPhone products, he was involved in almost all of Apple’s key product hardware designs.

Before leaving, his title was Vice President of Product Design, Acoustics, Materials & Connectivity Design for iPhone and Apple Watch. He holds more than 20 Apple patents under his name—from “cold-processed stainless-steel device body with flush bezels” to “moisture-resistant openings and liquid-resistant SIM card trays,” all of it is highly valuable hardware know-how.

But internally at Apple, Tan’s reputation is a bit complicated.

According to a leak by Bloomberg, a former colleague described him as “flies very close to the sun,” meaning he acts boldly and often “breaks from the norm.” In today’s context of a lawsuit, that remark is especially loaded.

In 2021, the position of senior vice president of hardware engineering opened up. Tan was one of the candidates.

But Apple ultimately chose John Ternus—the person who will take over as Apple CEO in September this year after Tim Cook.

According to insiders, Tan and Ternus have long been in a tense relationship, and even part of the hardware design team stood on Tan’s side. This loss in the power struggle laid the groundwork for Tan’s departure.

In December 2023, news of Tan’s departure was made public. He formally left in February 2024. After leaving Apple, he teamed up with two other legendary figures from Apple—former design chief Jony Ive and former vice president of industrial design Evans Hankey—to found an AI hardware company named io.

In May 2025, OpenAI spent $6.5 billion to acquire io. All io employees became OpenAI employees. Tan was naturally appointed OpenAI’s Chief Hardware Officer, becoming Apple’s number one target—its “defector” in its eyes.

If Tan is the “mastermind” in this lawsuit, then Chang Liu is the person who left the most “hard proof.”

What this former Apple senior electrical systems engineer did can be described as very “confusing.”

The complaint states that when he resigned in January 2026, he took a company-issued MacBook home without returning it.

What’s worse, he found that his system access permissions were still enabled. So he sent a message to his former colleague and engineer Yu-Ting “Alyssa” Peng, who was still working at Apple:

“LOL, I found I can still access [network storage]. That’s so hilarious.”

It’s said that the other replied: “I’m ready.” Then, using this authentication loophole, Liu downloaded dozens of Apple’s confidential files—including detailed information about unreleased products, engineering presentation decks, technical specifications, and manufacturing data.

Peng later also moved to OpenAI. Although she was not listed as a defendant, a large amount of “suspicious evidence” involving Liu was left on her Apple work computer. Apple also found that within hours of Liu leaving Apple, he sent Peng a text saying “I have another computer”—meaning he planned to use that other device to continue accessing Apple secrets.

Tan’s interview process for OpenAI further enraged Apple.

The lawsuit says that when interviewing Apple employees who were still on the job, Tan would directly state internal Apple code names for confidential projects—code names only Apple people would know.

He also encouraged candidates to “study” Apple’s confidential materials before the interviews, and even asked them to bring real Apple parts, CAD design files, and prototypes on site to “demonstrate” them. One candidate was so confused by the request that they said, “I didn’t even know I could take parts out of the office.”

Bloomberg reports that Tan prepared a detailed “checklist” and playbook for Apple employees planning to jump to OpenAI, teaching them step by step how to take information and how to bypass Apple’s offboarding security checks.

In the complaint, Apple disclosed a shocking figure: more than 400 former Apple employees are already working at OpenAI.

From industrial design, chips, and acoustics to supply chain management, OpenAI has effectively “copied” Apple’s core hardware team as a whole.

Apple warned that those 400 people hold large amounts of proprietary information that must remain confidential, while OpenAI is “using these confidential information” to build its own hardware business.

Besides personnel, the technology itself is also at the center of the fight. Apple accuses io (now OpenAI’s hardware division) of making Apple’s partners believe they had already been authorized by Apple through misleading communications, and of illegally using Apple’s proprietary metal surface treatment (metal-finishing) industrial design technology. Even when communicating with suppliers, OpenAI directly used Apple’s “internal terminology” to ask targeted questions—questions only Apple insiders would know to ask.

Why is Apple moving only now?

The answer is straightforward: OpenAI is making its own hardware, aiming to challenge the iPhone.

Acquiring Jony Ive’s io was just the first step. According to The Wall Street Journal, OpenAI’s first hardware product—an AI keyboard—will be released this month, and the company is also in full swing preparing for an IPO.

Apple’s choice to sue at this point is absolutely not a coincidence.

The Wall Street Journal analysis suggests Apple intends to slow down the competitor’s pace through litigation.

Bloomberg Intelligence analysts also believe that even if the case’s final outcome is uncertain, there is still an immediate real-world effect possible—squeezing OpenAI’s ability to raid Apple’s talent, and creating uncertainty along OpenAI’s path for hardware development and its IPO. Bloomberg expects Apple could win early targeted injunctions that force OpenAI to preserve evidence, while a complete court ruling could take years.

What’s also interesting is that in the complaint Apple mentioned that as early as February this year it had proactively contacted OpenAI to raise questions, but OpenAI never responded. Apple says it “has no choice but to resort to the law.”

This playbook sounds very familiar. In 2010, Jobs launched the famous “hot nuclear war” against Android manufacturers, and that line—“Even if we burn all the money we have, we’ll destroy Android”—is still widely discussed. That lawsuit lasted eight years. Now, history seems to be repeating itself, except the opponent has shifted from Google to OpenAI.

Musk watching the show

There’s also an entertaining onlooker in this lawsuit—Elon Musk.

On the day the lawsuit was filed, Musk posted mockery of OpenAI CEO Sam Altman on X. Their long-standing animosity runs throughout the history of AI development. Musk is one of OpenAI’s co-founders and in the early days donated roughly $38 million. Later, he fell out with Altman and in 2024 sued OpenAI for deviating from its nonprofit mission.

As a result, in May this year, a federal jury rejected Musk’s request, with a clean and decisive reason—“you sued too late.” The jury deliberated for less than two hours before issuing the ruling. OpenAI’s lawyer said outside court, “This decision confirms the lawsuit is nothing more than a hypocritical attempt to weaken a competitor.”

Now that Apple has “settled the score” for Musk, it’s no surprise he’s happy to watch.

The bigger chess game: Google became the “fisherman”

The biggest beneficiary of this lawsuit might be Google.

Apple and OpenAI’s cooperation had already largely fallen apart.

In June 2024, the two companies announced their partnership with fanfare, integrating ChatGPT into Apple’s ecosystem. But according to Bloomberg reporting in May this year, OpenAI was extremely unhappy with the results of the collaboration—Apple’s use of OpenAI technology inside the system was far less than expected.

With this shift, Google quietly stepped in. In January, Apple said its next-generation Apple Foundation Models would be based on Google’s Gemini model and cloud technology. At the WWDC keynote in June, the AI version of Siri Apple showcased was supported by Gemini technology behind the scenes.

This partnership was certainly not a last-minute move. Don’t forget that every year, Google pays Apple about $20 billion, making Google the default search engine for Safari. This is one of the most durable commercial alliances in tech history, spanning nearly two decades. Now that Apple and OpenAI have fallen out, Apple will likely deepen its AI bundling with Google.

That means Apple and OpenAI’s collaboration has ended. The grudge between the two has landed squarely in Google’s favor.

This creates a highly subtle competitive landscape: Apple and Google have been longtime enemies for more than a decade in mobile operating systems and search engines, yet in the AI hardware arena—facing OpenAI, the ambitious “intruder”—the two giants unexpectedly stand on the same side.

It also explains why Apple dares to sue decisively. It’s not that Apple has no exit route—Google is its “Plan B.” Cutting off cooperation with OpenAI has a cost, but if it can use that to slow down the competitor’s hardware progress while accelerating Apple’s own AI integration with Google, Apple can turn the crisis into an opportunity to re-plan.

Can litigation hold the opponent back, but can it protect the throne?

But at bottom, you can’t defend the kingdom by lawsuits alone.

Jobs’ “hot nuclear war” against Android lasted eight years. Android not only didn’t die—it became the largest mobile operating system in the world. What has kept Apple standing all this time is continuous innovation in iPhone products themselves, not victory in a courtroom.

Today, Apple is clearly behind in AI. Apple Intelligence has been criticized as “not living up to the name,” and in May this year Apple only just agreed to pay $250 million to settle a class action lawsuit over alleged false advertising of AI features. OpenAI’s hardware ambitions are indeed a threat—Jony Ive’s design talent combined with top-tier AI capability could, in theory, enable disruptive new devices. But if Apple wants to keep its territory, in the end it still has to let its own products speak.

Litigation can slow the opponent down, but it cannot replace self-evolution. Cook is about to step down, and Ternus is about to take over. Apple’s next decade won’t depend on how long a single lawsuit can drag the opponent—it depends on what kind of answers the next generation of products can provide.

After all, the history of technology is never written by lawyers. It’s just that in Silicon Valley, alliances and rivalries always form part of the story: today’s mortal enemies might be tomorrow’s allies; today’s staunch partners can flip overnight.