Tech

Apple to pay $250M to settle iPhone AI false advertising claims

Written by Heidi Cuthbert Published May. 6 2026

Apple (NASDAQ:AAPL) has agreed to a $250 million settlement to resolve a class-action lawsuit centered on the marketing of its generative AI suite, "Apple Intelligence."

First reported by the Financial Times, the settlement addresses allegations that the tech giant exaggerated the readiness and functionality of its AI features—specifically a major overhaul of its virtual assistant, Siri—prior to the launch of the iPhone 16.

The complaint alleged that Apple’s promotional campaigns created a misleading impression that advanced AI tools would be available to consumers much sooner than they were actually deployed.

Plaintiffs argued that Apple overstated the capabilities of the "new Siri," leading customers to purchase iPhone 15 and iPhone 16 models under the belief they were acquiring cutting-edge technology that remained incomplete or delayed at the time of sale.

While Apple has not admitted to any wrongdoing, the company opted for a settlement to avoid the costs and distractions of protracted litigation.

The proposed agreement provides a significant payout for affected consumers: U.S. customers who purchased an iPhone 15 or iPhone 16 between June 10, 2024, and March 29, 2025, may be eligible to receive up to $95 per device.

The legal challenge surfaced as Apple faced mounting pressure to compete with AI-forward rivals.

Since unveiling Apple Intelligence at WWDC 2024, the company has teased a Siri experience that mimics the conversational depth of chatbots like ChatGPT or Claude.

While rumors persist that the upgraded Siri may be powered by Google Gemini, recent reports suggest Apple’s upcoming operating system may allow users to select from various third-party large language models (LLMs).

The timing of the settlement is notable, arriving just weeks before Apple’s annual developer conference on June 8.

Industry analysts expect the company to use the event to provide a more definitive preview of the AI-enhanced Siri, potentially clearing the path for the full functionality that was at the heart of the legal dispute.