On Friday, Apple was hit with a proposed securities fraud class action lawsuit from shareholders, alleging the company misrepresented the timeline for integrating advanced AI into its Siri voice assistant, negatively impacting iPhone sales and stock price. The complaint claims shareholders incurred losses potentially worth hundreds of billions of dollars in the year ending June 9th, when Apple touted various product features and aesthetic upgrades but made only token AI releases.
Jonathan Stempel for Reuters:
CEO Tim Cook, Chief Financial Officer Kevan Parekh, and former CFO Luca Maestri are also defendants in the lawsuit filed in San Francisco federal court.
Shareholders led by Eric Tucker said that at its June 2024 Worldwide Developers Conference, Apple led them to believe AI would be a key driver of iPhone 16 devices, when it launched Apple Intelligence to make Siri more powerful and user-friendly.But they said the Cupertino, California-based company lacked a functional prototype of AI-based Siri features, and could not reasonably believe the features would ever be ready for iPhone 16s.
Shareholders said the truth began to emerge on March 7 when Apple delayed some Siri upgrades to 2026, and continued through this year’s Worldwide Developers Conference on June 9 when Apple’s assessment of its AI progress disappointed analysts.
Apple shares have lost nearly one-fourth of their value since their December 26, 2024 record high, wiping out approximately $900 billion of market value.
The case is Tucker v. Apple Inc et al, U.S. District Court, Northern District of California, No. 25-05197.
MacDailyNews Take: Shocker.
The Apple Intelligence vaporware [is] false advertising, fraud, and lies. Those will be the basis for class action lawsuits from iPhone, iPad, and Mac customers soon enough. And Apple will deserve them all. – MacDailyNews, March 14, 2025
See also: Apple pulls iPhone 16 ad touting nonexistent Apple Intelligence-powered Siri features – March 10, 2025
False advertising is false advertising. Even Tim Cook’s wheezing vaporware factory – or, more likely, its lawyers – can figure that out. – MacDailyNews, March 10, 2025
I bought a new iPhone for Siri with Apple Intelligence and all I got was this lousy glow. pic.twitter.com/I0G4Wxf5Im
— MacDailyNews (@MacDailyNews) March 25, 2025
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This is perhaps the only class-action that I feel is justified in years. Now, I don’t know that as a shareholder or iPhone buyer I deserve any compensation for this, but I do feel we were over-sold on Apple Intelligence.
As with ALL class actions lawsuits, the attorneys make money. Not the affected class.
The lawyers are not looking for a win on this. If this goes forward it will be virtually impossible to prove that Tim Cook and company purposely, intentionally, and knowingly mislead everyone during the 2024 WWDC.
If it gets granted class action status, the lawyers are hoping for a settlement. If a settlement happens the lawyers will get all their costs & fees then the members of the class will get $1.25 each (maybe not even that much).
Time to get Siri on the stand. Her testimony will make everything clear.
The questions will have to be limited in scope. “What is the high temperature today?” And “What’s AAPL stock at?” Is about all it can answer.
But seriously, the trial discovery will get access to all communications of these people about this topic. That could be devastating to Tim Cook.
Wow, this is a bummer for Apple shareholders. It highlights the pressure companies face to keep up with AI advancements. I wonder if the focus on cosmetic changes masked a real lack of progress in AI integration. It reminds me of that game, Eggy car – all appearances, and then you struggle with the core functionality. Maybe a course correction is needed.