Apple has sued OpenAI in federal court, alleging that the artificial-intelligence company misappropriated trade secrets and breached contractual obligations while developing a new generation of AI hardware.

The lawsuit, filed in the Northern District of California, names OpenAI, two former Apple employees now working for the company, and io Products—the hardware startup founded by former Apple design chief Jony Ive and acquired by OpenAI. Ive is not named as a defendant and is not accused of wrongdoing.

Apple alleges that a former engineer downloaded confidential hardware files containing details about unreleased products and technical specifications. It also claims that OpenAI hardware chief Tang Tan used proprietary information while recruiting Apple employees and communicating with suppliers.

OpenAI rejected the premise of the allegations. A company spokesperson told CNN that OpenAI has no interest in other companies’ trade secrets and remains focused on developing technology for users.

The dispute could complicate OpenAI’s planned hardware launch and marks a sharp deterioration in the companies’ relationship. Apple and OpenAI announced a partnership in 2024 to integrate ChatGPT into Apple products, while both companies have since intensified their competition over consumer AI.

OpenAI has recruited a number of Apple engineers as it builds a dedicated hardware division. Its still-secret device project is expected to focus on ambient AI and reduce users’ dependence on conventional apps and screens.

Source: CNN Business. The allegations have not been adjudicated, and the defendants may contest them in court.