Apple Trade Secrets Suit Puts OpenAI’s Hardware Ambitions and IPO Timeline in Doubt

Apple last Friday filed a trade secrets lawsuit against OpenAI, accusing the company of a pattern of misconduct aimed at getting current and former Apple employees to share confidential information. The complaint, which TechCrunch reported on, names OpenAI’s chief hardware officer, Tang Tan, and alleges that more than 400 former Apple employees now work at the AI company.

OpenAI responded with a carefully hedged statement, saying it is “not aware of any evidence that this complaint has merit.”

The timing of the lawsuit is especially damaging for OpenAI, which is reportedly eyeing an initial public offering as early as the end of this year or early next year. The company has filed confidentially for an IPO, according to TechCrunch. At the same time, OpenAI is working on its first hardware product — a mobile smart speaker developed with former Apple designer Jony Ive — a venture that could be directly implicated by Apple’s allegations.

“Even setting aside whether or not the court grants any kind of injunctive relief or any kind of restraining order over what OpenAI is doing, it just naturally can lead to that sort of situation where it’s going to cause some delays in what OpenAI is working on,” TechCrunch reporter Sean O’Kane said on the publication’s Equity podcast. “Which I’m sure was probably part of the reasoning behind Apple doing this. They don’t do this stuff willy nilly.”

The lawsuit’s potential to disrupt OpenAI’s hardware plans and IPO is a central theme of the Equity discussion. O’Kane noted that while OpenAI’s current business is overwhelmingly software, the company would have to pitch bankers and investors on its addressable market, including any future hardware division. “If they have a big amount of that pegged to a potential hardware division and hardware products, this could be a huge risk to that and changes a lot of the calculus of how the IPO gets priced,” he said.

Apple’s complaint alleges a pattern of misconduct reaching the highest levels of OpenAI, specifically targeting employees who previously worked at Apple. The naming of Tang Tan, OpenAI’s chief hardware officer, ties the alleged trade secret theft directly to the development of a competing hardware product.

TechCrunch’s Anthony Ha highlighted the scale of the talent drain, noting that Apple claims more than 400 of its former employees now work at OpenAI. “Both of them are very large companies with many thousands or tens of thousands of employees,” Ha said. “So as a percentage, it’s not necessarily huge. But that seems like a lot of people and a pretty serious talent drain.”

The panel also debated whether OpenAI would seek a quick settlement or, having recently weathered a courtroom battle with Elon Musk, be willing to endure another trial. TechCrunch’s Kirsten Korosec predicted the latter, suggesting OpenAI may have learned from that experience that it can survive the cost and embarrassment.

“They went through it and they survived and they’ll be okay if they have to do another trial,” Ha added, summarizing the possible lesson from the Musk case.

The lawsuit comes at a moment when AI companies are under increased scrutiny over data and trust. TechCrunch noted that the Equity episode also discussed broader themes, including Microsoft CEO Satya Nadella’s warnings to enterprises about handing data to AI labs and the role of open-source alternatives.

For now, Apple’s legal action injects significant uncertainty into OpenAI’s near-term business plans. The company’s hardware ambitions — a mobile smart speaker that would always be listening, as O’Kane noted — and its confidential IPO filing both face new risks from the litigation. Whether OpenAI settles quickly or fights in court, the lawsuit is likely to cause delays and raise questions for investors, just as the company prepares to go public.