Apple, OpenAI clash over new evidence in trade-secrets lawsuit as October hearing looms

A federal judge in San Jose is weighing dueling evidence in Apple's trade-secrets lawsuit against OpenAI, after both sides filed a stack of new sworn declarations in the final days of August accusing each other of bad faith. Apple says a former hardware engineer downloaded confidential circuit schematics after he had already left the company and tried to cover his tracks; OpenAI says Apple is trying to criminalize an entry-level access mistake to slow down a competitor in consumer hardware.

The clash is the latest turn in Apple Inc. v. Liu, filed in the U.S. District Court for the Northern District of California on July 10. Apple is seeking a preliminary injunction that would bar OpenAI from continuing hardware development built, it argues, on stolen Apple intellectual property, and it wants expedited discovery to get at evidence before it disappears. A hearing on both motions is set for October 1 before Judge Edward J. Davila, with a status conference set for September 14, according to the case docket.

What Apple alleges

The complaint names OpenAI Group PBC, OpenAI Foundation and its hardware unit io Products, along with two former Apple employees: Chang Liu, a senior systems electrical engineer who spent eight years at Apple before joining OpenAI in 2026, and Tang Yew Tan, a 24-year Apple veteran who led product design for the iPhone and Apple Watch. Apple alleges Liu failed to return his company-issued laptop, exploited an authentication flaw to reach internal network storage after his departure, and downloaded dozens of confidential hardware files, including material on circuit board manufacturing. Separately, Apple claims Tan used internal project code names while recruiting Apple staff for OpenAI and asked candidates to bring hardware components and CAD files from the office.

In a court filing reported by TechCrunch on August 31, Apple went further, alleging that after Liu learned of the company's investigation in June, he asked a colleague still employed at Apple, Yu-Ting "Alyssa" Peng, to help him destroy evidence. Apple's attorneys argue the newly disclosed material shows the company is not running what OpenAI has characterized as a "fishing expedition," and that its trade secrets are actively being used while evidence tied to that use is being erased.

The numbers

• Apple's complaint states roughly 400 former Apple employees now work at OpenAI, a figure it points to as evidence of a broader recruiting effort rather than isolated hires.
• OpenAI acquired io Products, the hardware startup co-founded with former Apple design chief Jony Ive, in a deal Apple's filings and subsequent reporting have valued at $6.5 billion.
• The docket lists more than 30 declarations filed in support of, or opposition to, the preliminary injunction motion in the week leading up to August 31 alone, several dozen pages of sworn testimony from engineers, executives and outside experts on both sides.
• The case was reassigned in late July to Judge Davila after the parties could not agree to proceed before a magistrate judge, with the October 1 hearing now covering both the injunction and Apple's separate motion for expedited discovery.

How the dispute got here

Apple and OpenAI have been commercial partners since 2024, when Apple integrated ChatGPT into iOS as an option for Siri queries the assistant could not handle on its own. According to reporting from NBC News, that relationship cooled after Apple raised concerns in February that its proprietary technology was surfacing inside OpenAI's hardware ambitions, which accelerated after OpenAI's 2025 acquisition of io Products. Apple's complaint frames the alleged scheme as coordinated: engineers who left for OpenAI allegedly retained irregular access to internal systems, while recruiters allegedly used Apple's own confidential product code names to entice current staff. A Fortune analysis of the complaint catalogued the more colorful details, including a message in which Liu allegedly told a colleague, "LOL, I found out I can access the [network storage], so funny," after leaving the company.

OpenAI moved to dismiss the case in August, and on August 26 filed a reply in support of that motion, arguing Apple had not shown that any specific trade secret was misappropriated. On August 31, in its opposition to Apple's injunction motion, OpenAI's lawyers wrote that "this dispute is a mess of Apple's own making, and it is trying to blame everyone else," according to filings reviewed by Business Today.

"This dispute is a mess of Apple's own making, and it is trying to blame everyone else."

OpenAI's opposition, filed as docket entry 97, argues that Apple's own security practices are partly to blame. The company's lawyers contend that Apple allows employees to sync work files to personal iCloud accounts, making it difficult to draw a clean line between company property and an employee's own data, and that Apple's practice of escorting departing staff off the premises the same day leaves little time to return devices or scrub access properly. OpenAI says any post-employment access by Liu was "residual" rather than deliberate.

Who is affected

The immediate parties are Apple, OpenAI's corporate entities and the two named former Apple employees, but the case is being watched closely across Silicon Valley's hardware and AI sectors because of what it could mean for how companies police employee mobility. A ruling in Apple's favor on the preliminary injunction would freeze part of OpenAI's hardware program, io Products' consumer device work among the most closely watched AI hardware efforts in the industry, while it remains in litigation. A win for OpenAI at the motion-to-dismiss stage could narrow the case substantially before discovery goes further. Employment lawyers have also noted the case as a test of how aggressively companies can use trade-secret law against rivals hiring their alumni, given Apple's claim that hundreds of its former staff are now on OpenAI's payroll.

What happens next

Judge Davila has scheduled a status conference for September 14 and a combined hearing on Apple's preliminary injunction and expedited discovery motions for October 1 in San Jose. Apple filed a supplemental brief in support of expedited discovery on August 31, and the court set a September 4 deadline for responses to Apple's related administrative motion. Until the injunction motion is resolved, OpenAI's hardware development is continuing without a court-ordered pause. Both sides are expected to file additional sealed and redacted material ahead of the October hearing, and the outcome of the motion to dismiss, still pending after OpenAI's reply in late August, could determine how much of the case proceeds to trial.