Some iPhone users may receive up to $95 each, totaling $250 million, after a lawsuit alleged the company engaged in false advertising about its AI capabilities, according to a proposed order released on May 5.

The settlement, which Apple confirmed, comes amid an arms race between smartphone manufacturers over artificial intelligence (AI).

What Models Are Included?

It covers American customers who purchased any iPhone 15 Pro, iPhone 15 Pro Max, or iPhone 16 models from June 10, 2024, to March 29, 2025. Consumers had alleged in a lawsuit that the Cupertino, California-based tech giant launched a marketing campaign that promoted features that didn’t yet exist and misled them into buying the devices.

Lawyers for the iPhone customers, who made the filing in the San Francisco-based federal court for the Northern District of California, asked the court for preliminary approval of the proposed $250 million settlement. If the judge approves it, the settlement would be one of the largest-ever agreed upon by Apple.

The settlement covers approximately 37 million devices purchased in the United States.

What Did the Lawsuit Entail?

The plaintiffs’ lawsuit took particular aim at Apple’s marketing of AI capabilities that would have been allegedly deployed in those iPhone models. The suit said that Apple “promoted AI capabilities that did not exist at the time, do not exist now, and will not exist for two or more years.”

Apple also “saturated the internet, television, and other airwaves to cultivate a clear and reasonable consumer expectation that these transformative features would be available upon the iPhone’s release,” according to the lawsuit, filed in March 2025.

“This drove unprecedented excitement in the market, even for Apple, as the company knew it would, and as part of Apple’s ongoing effort to convince consumers to upgrade at a premium price and to distinguish itself from competitors deemed to be winning the AI-arms race,” the complaint said.

What Comes Next?

While a judge first needs to approve Tuesday’s proposed settlement, iPhone owners are eligible for a payment of at least $25 for each device, and that amount could go up to $95 depending on how many other claims are filed, “and other factors.”

The iPhone customers will be informed about the result of the settlement by email or through the mail, the proposed order said. Then, those customers would be able to file a claim via a settlement website, which has yet to be established.

Apple Confirms Settlement

In a statement to multiple media outlets on May 5, Apple said that it “has reached a settlement to resolve claims related to the availability of two additional features.”

“We resolved this matter to stay focused on doing what we do best,“ the statement said, ”delivering the most innovative products and services to our users.”

An Apple representative did not immediately respond to an Epoch Times request for comment on May 6.

No Liability Admission Required

According to the proposed order, the court would not determine the merits of the lawsuit, and Apple would not have to admit liability.

“Furthermore, the settlement and any and all negotiations, documents, and discussions associated with it will not be deemed or construed to be an admission or evidence of any violation of any statute, law, rule, regulation, or principle of common law or equity, or of any liability or wrongdoing by Defendant, or the truth of any of the claims,” the documents state.

The evidence in the settlement also won’t “be discoverable or used, directly or indirectly, in any way, whether in this action or in any other action or proceeding before this or any other Court, administrative agency, arbitration forum, or other tribunal, except for purposes of demonstrating, describing, implementing, or enforcing the terms and conditions of the settlement,” it added.

Apple’s AI features remain in development as rivals Google and Samsung have been rolling out more of the technology on their own devices. Apple is expected to unveil its Siri AI upgrade this year, likely at its annual developer conference next month.

Apple added in its statement to news outlets that it has “introduced dozens of features” since it launched its Apple Intelligence, such as Visual Intelligence and Live Translations.

The Associated Press contributed to this report.