Apple sued by shareholders for allegedly overstating AI progress

[NEW YORK] Apple was sued on Friday (Jun 20) by shareholders in a proposed securities fraud class action that accused it of downplaying how long it needed to integrate advanced artificial intelligence (AI) into its Siri voice assistant, hurting iPhone sales and its stock price.

The complaint covers shareholders who suffered potentially hundreds of billions of US dollars of losses in the year ending Jun 9, when Apple introduced several features and aesthetic improvements for its products but kept AI changes modest.

Apple did not immediately respond to requests for comment. 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 Mar 7 when Apple delayed some Siri upgrades to 2026, and continued to this year’s Worldwide Developers Conference on Jun 9 when Apple’s assessment of its AI progress disappointed analysts.

Apple shares have lost nearly one-fourth of their value since their Dec 26, 2024 record high, wiping out approximately US$900 billion of market value. REUTERS