Apple was sued for overpromising on AI. Now it’s paying $250 million to iPhone users.

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Apple has reached a $250 million settlement in a lawsuit that accused the company of exaggerating Apple Intelligence’s intelligence.

The suit claimed that Apple misled iPhone users about Apple Intelligence, the company’s suite of AI tools, before and after the launch of the iPhone 16 in Sep. 2024. The settlement filing states that U.S. shoppers who bought certain iPhone 15 and iPhone 16 models between June 10, 2024 and March 29, 2025 may qualify to receive a portion of the $250 million settlement.

Multiple class-action suits were filed over Apple Intelligence marketing before being combined into a single action. According to the May 5 filing with a U.S. District Court in the Northern District of California, both parties in the case have now agreed to settle.

Once a judge approves the agreement, qualifying Apple customers will be able to receive payments between $25 to $95.

As is typical in class-action settlements, Apple has not admitted any wrongdoing. The company defended itself in a statement sent to the New York Times: “We resolved this matter to stay focused on doing what we do best, delivering the most innovative products and services to our users.”

Why was Apple sued in the first place?

When ChatGPT burst onto the tech scene in 2022, it ignited a global AI arms race. While companies like Google have been able to release competitors to ChatGPT, Tim Cook’s company staked out a cautious position on the sidelines.

In 2024, Apple launched its own AI tools under the banner of Apple Intelligence. Early marketing for Apple Intelligence highlighted a variety of use cases, such as writing emails and a more conversational, intelligent Siri.

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The lawsuit states that Apple promised iPhone shoppers “enhanced Siri features” and advanced AI capabilities, and that its failure to deliver violated consumer protection laws.

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