Apple filed a lawsuit against OpenAI in July in the Northern District of California, accusing a former engineer of retaining access to confidential files and destroying evidence after learning of an internal investigation. The suit also names another ex-employee and OpenAI itself, alleging theft of proprietary data. Apple is seeking an injunction before OpenAI ships a consumer device, while OpenAI has moved to dismiss the case.
The Allegations Against Liu
The lawsuit centers on Chang Liu, an engineer who Apple says kept access to company files after his exit and then destroyed files once he found out about an internal probe. Apple also claims Liu recruited Yu-Ting Peng, a colleague at OpenAI, to erase evidence in June. A second former employee, Tang Yew Tan, is accused alongside OpenAI of stealing confidential data.
The case involves more than 400 former Apple employees who have joined OpenAI, many of them working on OpenAI's secret consumer hardware project. Apple has handed Liu's old work laptop to forensic examiners, but the decisive exhibits remain redacted, leaving the full scope of the alleged theft unclear.
OpenAI's Motion to Dismiss
OpenAI filed a motion to dismiss on August 6, arguing that Apple's own access controls created the exposure and that the departures are ordinary mobility in the tech industry. The company points to the $6.5 billion it paid for Jony Ive's startup io, a deal that brought former Apple executives into its hardware group. That acquisition, OpenAI says, explains the flow of talent without any wrongdoing.
Apple's lawsuit paints a different picture, describing a coordinated effort to strip proprietary information as part of a broader hiring spree. The redacted exhibits could be central to that argument, but they remain under seal for now.
The Hardware Race and the Stakes
Both sides are racing against a clock. Apple wants an injunction before OpenAI ships a device, which would force a court to weigh the risk of leaked trade secrets against OpenAI's product timeline. OpenAI wants the case dismissed before discovery reaches its hardware roadmap, which would keep its plans out of the public record.
The tension spilled onto social media after the filing, with Elon Musk and Sam Altman trading insults on X. Apple's stock closed at $316.85 on Monday, down 0.89% on the day but up 16.38% for the year and 3.95% over the past month, suggesting investors aren't yet pricing in a major disruption.
The case now hinges on whether the court grants Apple's injunction before OpenAI ships a device, or dismisses the suit before discovery reaches the hardware roadmap.
