Apple Inc. has sued OpenAI and two former employees, accusing the ChatGPT maker of running what the company called a “rotten to the core” operation to steal trade secrets tied to Project Atlas, Apple’s closely guarded program to build its own AI processors. The complaint, filed in federal court, also names io Products, the design firm founded by former Apple design chief Jony Ive, which the lawsuit says helped move Apple’s confidential documents out of the company. CNBC, which first reported the case, said Apple described the alleged plot as proceeding “on all fronts at the same time.”
The dispute centers on Project Atlas, an in-house chip effort that people familiar with Apple’s strategy describe as one of the most important hardware programs in the company’s modern history. Apple has spent more than a decade designing its own silicon, from the A-series processors in the iPhone to the M-series chips that anchor its Mac and iPad lines, and it has pushed in recent years into server-grade AI processors meant to power the machine-learning features shipping across its devices. The complaint alleges that two employees who left Apple for roles connected to OpenAI copied internal documents related to that program before their departures, according to the filing.
The two former employees are described in the complaint as engineers who worked on Apple’s AI hardware efforts, CNBC reported. Both left Apple within the past two years, and both now work on hardware projects tied to OpenAI, the report said. Apple has not publicly identified which documents it believes were taken, beyond describing them as confidential material related to chip design and planning.
io Products gives the case an unusual second act. Ive, who designed the iPhone, the iMac and much of the modern Apple catalog before leaving the company in 2019, has spent recent years building an AI hardware venture with OpenAI Chief Executive Sam Altman. The company, which operates as io Products, has raised more than $1 billion from investors including Emerson Collective and Thrive Capital, according to earlier reports, and has hired engineers from Apple and other hardware makers. Fortune, which reported additional detail on the claims, said the lawsuit alleges io Products “assisted” in the transfer of Apple’s proprietary documents, including material related to chip architecture.
The case lands at an awkward moment for Apple and OpenAI, which are public partners. Since June 2024, Apple has used ChatGPT to answer certain queries inside its Apple Intelligence features, a deal announced at its Worldwide Developers Conference. Analysts said the lawsuit does not necessarily unravel that arrangement, which covers software features rather than hardware, but it complicates a relationship built on mutual dependence: OpenAI wants distribution through Apple’s devices, and Apple wants a credible AI partner while it builds out its own models.
Legal specialists said trade-secret cases of this kind are among the hardest in technology litigation. A plaintiff must show the information was secret, that it had economic value and that it was obtained through improper means, each element open to a battle of expert witnesses. “Apple has the resources to litigate this aggressively,” said a lawyer who handles trade-secret cases for technology companies and was not involved in the dispute. “Proving what an employee carried out the door, and where it ended up, is another matter.”
The suit also fits a wider pattern of AI rivals taking their fights to court. Alphabet’s Waymo and Uber settled their self-driving trade-secret dispute in 2018 for $245 million. OpenAI and xAI traded accusations over talent poaching last year. The Scarlett Johansson voice dispute put a spotlight on the legal boundaries of AI products. Courts, in other words, have become a venue for AI competition as much as the marketplace has.
For Apple, Project Atlas is part of a broader push to control the components behind its AI products, the way the M-series transition reshaped its Mac line. A leak of that roadmap to a rival, if proven, would be a serious blow to a program the company has kept unusually quiet. For OpenAI, the stakes are different: the company has talked about building its own AI hardware and has hired chip engineers toward that end, and a drawn-out suit over misappropriated trade secrets could complicate those plans and distract management from the race to ship new models.
The case now moves into discovery, a phase in which both sides will seek emails, messages and hiring records, a process that in similar suits has run for years before trial. Analysts said a settlement is possible at any point, particularly if the two companies conclude that the legal fight costs more than it wins. Whatever the outcome, the message to the industry is already clear: in the AI hardware race, the secrets are as contested as the chips themselves.
