Apple to pay $250M to settle lawsuit over AI feature marketing

Apple has agreed to pay $250 million to settle a class action lawsuit—a legal action where a group of people sue as a collective—in the U.S. regarding the marketing of its artificial intelligence features. The Financial Times was the first to report the news of the settlement. Although Apple has agreed to the payout, the company did not admit to wrongdoing in court, choosing to settle the case rather than continue with litigation.

The legal dispute centered on how Apple marketed its AI platform, Apple Intelligence, ahead of the launch of the iPhone 16. The lawsuit alleged that Apple engaged in “false advertising” and “exaggerated the breadth of features” that the platform would bring, which included a significantly upgraded version of its assistant, Siri. According to the complaint, the company created the impression that advanced AI capabilities would be available to users sooner than they actually were. The plaintiffs allege that Apple “overstated both the readiness and functionality” of these features, particularly the promised improvements to Siri, which have yet to fully materialize. Consequently, the complaint claims that consumers who purchased the iPhone 15 or iPhone 16 believed they were paying for cutting-edge AI tools that were not actually available at the time of purchase, arguing that Apple’s marketing influenced buying decisions based on features that were incomplete or delayed.

Under the proposed agreement, eligible U.S. customers who purchased an iPhone 15 or iPhone 16 between June 10, 2024 and March 29, 2025 could receive up to $95 per device. Meanwhile, Apple continues to develop its AI capabilities. The company has been touting a more advanced version of Siri since it unveiled Apple Intelligence in 2024 during WWDC. These anticipated updates are expected to help Siri function more like modern AI chatbots such as ChatGPT or Claude. While the upgraded experience is rumored to be powered by Google Gemini, newer reports state that Apple’s next iPhone operating system may let users choose from a number of third-party large language models. The settlement arrives ahead of Apple’s annual developer conference on June 8, when the company is expected to preview a version of its AI-enhanced Siri.

Why it matters

This settlement underscores the growing legal risk for tech companies as they navigate the gap between aggressive AI marketing and the actual, often delayed, delivery of promised features.