Apple alleges ex-engineer's 'LOL' access led to trade secrets theft at OpenAI

Apple has filed a lawsuit against OpenAI, accusing the AI company of benefiting from confidential information allegedly taken by former Apple employees. At the centre of the case is ex-iPhone engineer Chang Liu, whom Apple claims retained access to its internal systems after joining OpenAI and downloaded sensitive company data, Bloomberg reported

The 40-page lawsuit also alleges that OpenAI encouraged Apple employees to study confidential material before interviews and even bring hardware prototypes to meetings.

Apple claims engineer accessed files after leaving

According to the lawsuit, Liu left Apple with a company-issued MacBook that he allegedly never returned. Apple also claims he remained in contact with a former colleague, Alyssa Peng, and continued accessing Apple's internal file servers through a software bug even after joining OpenAI.

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Apple alleges Liu discovered the flaw and messaged Peng, writing: "LOL, I found out I can access the [network storage], so funny."

The company says Liu then downloaded confidential presentations, hardware designs, manufacturing details and testing procedures while working at OpenAI.

Apple further alleges Peng helped Liu obtain additional information using her own Apple laptop before she too joined OpenAI's hardware division in April.

OpenAI denies wrongdoing

Responding to the lawsuit, OpenAI rejected the allegations.

"We have no interest in other companies' trade secrets. We remain focused on building innovative technology that empowers people everywhere," an OpenAI spokesperson said.

Apple accuses OpenAI of systematic recruitment drive

Apple claims the alleged incident was part of a broader effort by OpenAI to recruit Apple engineers and gain access to confidential information.

According to the complaint, OpenAI's hardware division has hired more than 400 former Apple employees by offering higher salaries and stock options. Apple alleges prospective hires were encouraged to review confidential documents before interviews and, in some cases, bring hardware components and prototypes to so-called "show-and-tell" sessions.

The iPhone maker argues this amounted to a "systematic effort to acquire, retain and use" Apple's trade secrets to accelerate OpenAI's hardware ambitions.

AI hardware race fuels rivalry

The lawsuit comes as Apple and OpenAI increasingly compete in the emerging AI hardware market despite their broader partnership.

A key figure in the dispute is former Apple executive Tang Tan, who led the design of products including the iPhone and Apple Watch before leaving in late 2023. Tan later joined forces with former Apple design chief Jony Ive and OpenAI CEO Sam Altman to develop a new generation of AI-powered devices.

Their startup, io Products, was acquired by OpenAI in a $6.5 billion deal last year and now forms the foundation of the company's hardware business.

Apple alleges interviews were used to gather secrets

Apple claims Tan used job interviews with prospective recruits to collect information about unreleased Apple products.

In one example cited in the lawsuit, an employee allegedly accessed details about an internal project just hours before interviewing with Tan, who then questioned the employee about the same project during the interview.

The company also alleges that new hires were instructed to send information from their Apple devices to personal email accounts before resigning and were given a checklist designed to avoid detection by Apple's security systems.

Apple says it attempted to resolve the matter privately by contacting OpenAI in February and asking it to investigate whether confidential Apple information had reached the company. According to the lawsuit, OpenAI never responded.

The legal battle marks a sharp escalation in tensions between the two technology giants as they race to develop AI-powered devices that could eventually challenge the iPhone.