Apple has agreed to pay $250 million to settle a lawsuit filed by iPhone buyers who accused the tech giant of misleading marketing over its much-hyped artificial intelligence features branded as “Apple Intelligence.”

The case, filed in a California federal court, alleged that Apple promoted advanced AI-powered capabilities for iPhones — including a smarter and more personalized Siri assistant — but failed to deliver several of the advertised features.

According to court documents, Apple did not admit wrongdoing but agreed to settle the dispute in order to resolve the litigation tied to the company’s AI marketing campaign.

Under the proposed settlement, eligible customers in the United States who purchased iPhone 15 and iPhone 16 models between June 2024 and March 2025 may receive compensation ranging from $25 to $95.

Lawyers representing consumers argued that Apple’s promotional campaign around new AI tools amounted to “false advertising,” claiming some promised features either remained unavailable or did not perform as presented.

An Apple spokesperson said the case focused on the availability of “two additional features” linked to Apple Intelligence and stressed that the company chose settlement to remain focused on delivering innovative products and services.

The lawsuit comes at a time when global tech firms are aggressively promoting AI-powered products, increasing pressure on companies to match marketing promises with real-world performance.

Analysts say the case could become a landmark example of growing legal scrutiny around AI advertising, as consumers and regulators worldwide demand greater transparency from technology companies racing to dominate the artificial intelligence market.