Apple was accused of overpromising in AI. It is now paying $250 million to iPhone users.

Apple has reached a $250 million settlement in a lawsuit accusing the company of exaggerating Apple Intelligence.

The lawsuit alleged that Apple misled iPhone users about Apple Intelligence, the company’s AI tools division, before and after the launch of the iPhone 16 in September 2024. The filing of the settlement means that American consumers who bought certain models of the iPhone 15 and iPhone 16 between June 10, 2024 and March 29, 2025 to receive a share of $250 million.

Multiple class action suits were filed by Apple Intelligence Marketing before they were consolidated into a single action. According to a May 5 filing in the US District Court for the Northern District of California, both sides in the case have agreed to settle.

Once the judge approves the settlement, eligible Apple customers will be able to receive payments of between $25 and $95.

As is common in class action settlements, Apple did not admit any wrongdoing. The company defended itself in a statement sent to New York Times: “We resolved this issue so we can stay focused on doing what we do best, bringing the most innovative products and services to our users.”

Why was Apple sued in the first place?

When ChatGPT exploded onto the tech scene in 2022, it set off a global AI arms race. While companies like Google have been able to free competitors from ChatGPT, Tim Cook’s company has taken a cautious position on the sidelines.

In 2024, Apple will launch its AI tools under the Apple Intelligence banner. Early marketing for Apple Intelligence highlighted a variety of uses, such as writing emails and a more conversational, smarter Siri.

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

Apple’s ongoing work on an AI version of Siri has been one of the biggest ongoing stories in the tech industry in recent years. The company is expected to finally release an updated Siri at the WWDC 2026 event in June, two years behind schedule.

In short, the suit alleges that Apple oversold customers on AI features that have not yet been developed, and remain undelivered today.

“We are proud to have reached a landmark settlement on behalf of consumers who should feel confident and secure when deciding where to spend their hard-earned money,” said Ryan Clarkson, founder and managing partner of the Clarkson Law Firm, one of the firms involved in the class action lawsuit. “We are at a turning point for AI, and the decisions companies and regulators make now will shape how this technology affects everyday people.”

Clarkson told Mashable that “the balance of power between ordinary consumers and the rich and powerful corporations” may hinge on cases like these, at least “until the political gridlock is removed from Washington.” He called out companies like Apple for “mandatory arbitration provisions buried in pages of so-called terms of service that avoid accountability, close court doors, and force people to file low-dollar claims in secret courts out of the public eye.”

What iPhone models are included in the class action settlement?

The agreement stipulates that consumers living in the US who purchase iPhones with Apple Intelligence features between June 2024 and March 2025 may be eligible for compensation. Phones named in the agreement include:

• iPhone 16

• iPhone 16e

• iPhone 16 Plus

• iPhone 16 Pro

• iPhone 16 Pro Max

• iPhone 15 Pro

• iPhone 15 Pro Max

Generally, class action settlements like these require approval from a judge. Notifications will automatically go out to many customers, and a payment website will be created with more information about the rights of consumers in the matter.

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