Apple AI ads did not make ‘adequate’ disclosures, watchdog says
Apple iPhone 16s lined up
An advertising watchdog said Tuesday that Apple went too far with marketing that touted the availability of Apple Intelligence features that weren’t released when the ads were broadcast.
The National Advertising Division, a non-profit focused on “truth in advertising,” said that following an inquiry from the organization about Siri improvements, Apple told it that it would permanently discontinue a TV ad called “More Personal Siri” that focused on a big AI improvement to Siri.
That ad premiered in September and promoted the iPhone 16 with unreleased features. In March, Apple said it would delay the release of those features to “the coming year.”
“NAD recommended that Apple avoid conveying the message that features are available when they are not,” the group said.
Apple didn’t respond to a request for comment. The company told NAD it disagreed with the findings but would follow the group’s recommendations, the non-profit said.
NAD’s decision is the latest blow to Apple’s reputation with artificial intelligence technology and its struggles to market the iPhone 16’s AI features.
Apple is also facing class-action lawsuits over those Apple Intelligence ads, and the company in January turned off its AI summary feature for news apps after users and the BBC discovered that the feature at times twisted headlines to display false information.
Besides pulling the ad, which featured “The Last of Us” actor Bella Ramsey, off of YouTube in March, Apple has made other changes to its marketing.
Apple’s website no longer says Apple Intelligence is “available now” — the tagline now reads “AI for the rest of us.” Apple has also begun running a new ad focused on another Apple Intelligence feature called “Clean Up” that can edit objects or people out of photo’s backgrounds.
The company in June unveiled Apple Intelligence, its marketing term for its suite of AI features. Apple’s newest iPhones, the company said at the time, would be able to access image generators, custom emojis, intelligently-summarized notifications, and eventually, a vastly improved Siri.
When the iPhone 16 was released in September, Apple Intelligence was featured on television ads, billboards and the company’s website as a key reason to buy the iPhone 16. But the AI features rolled out in waves over the course of months as software updates, even while Apple touted the features.
Apple did not make ‘adequate’ disclosures
NAD’s decision is focused on Apple promoting features that weren’t available to the public at the time of the ads.
“Apple did not adequately disclose that the features were not available and reasonable consumers could take away the message that these features were available at the time these claims were first made, which they were not,” the decision said.
The NAD is part of BBB National Programs, a non-profit that offers programs to various industries so they can regulate themselves. Companies that participate in the voluntary program agree to submit to and participate in the NAD’s evaluation process.
At the end of a decision, NAD usually decides whether specific advertising claims were supported by facts. If they are unsupported, NAD pushes for changes. The Apple case was brought by the NAD itself, said Phyllis Marcus, NAD vice president.
“Apple participated and agreed to take our decisions and recommendations into account,” said Phyllis Marcus, the VP of National Advertising Division.
The majority of NAD cases are brought by one company complaining about a rival’s ads, but NAD is starting to look at claims around AI tools, Marcus said. The Apple decision signals an increased emphasis by regulators and other oversight organizations to scrutinize AI claims.
In its report, NAD found that some key Apple Intelligence features — such as image generation and ChatGPT integration — weren’t available at launch despite being advertised as “available now.”
The company’s claims around Apple Intelligence are now accurate, NAD said. It added that Apple had made changes to its marketing materials about the Siri feature that “adequately” communicated the status of the delayed feature.
Most Apple Intelligence features announced last June have launched and are turned on by default on new iPhones in the U.S.
Investors are looking for signs that Apple Intelligence could boost Apple stock by driving more iPhone upgrades than usual.
About 80% of U.S. users with supported iPhone have tried the features, and more than 50% of current iPhone owners who are looking to upgrade say it will be very important to have Apple Intelligence on their next device, according to results from a Morgan Stanley survey published Tuesday.
Over half of respondents said they would pay $10 or more per month for the feature, the note said, suggesting that consumers see value in the software.
WATCH: Apple has done so much to create new jobs here, just not manufacturing jobs, says Jim Cramer
China’s artificial intelligence device market is already booming, and in the advanced technology race against the U.S., the country’s expertise in hardware could give it an edge.
“The advantage comes from the fundamental root that China is a nation of manufacturing,” Dr. Kai-Fu Lee, CEO of 01.AI and chairman of Sinovation Ventures, told CNBC. “Today, the competition is on the software, the models, the agents, the applications. But soon it will move to devices.”
Meta has sold millions of its smart glasses since introducing the specs in 2023, and the Chinese have caught on, with more than 70 Chinese companies creating competing products in the space.
Eyewear from companies such as Inmo and Rokid are sold worldwide. Xiaomi and Alibaba‘s are found only in China and are embedded with the tech giants’ own AI.
Alibaba’s DingTalk, a messaging platform for the workplace, this year released a credit card-sized AI gizmo meant for note-taking on the job.
The DingTalk A1 can record, transcribe, summarize and analyze speech from as far as 8 meters (26 feet) away, about the length of a large boardroom.
The device is similar to the Plaud Note, which is available in the U.S.
The device experimentation in China spans from the practical to the unconventional.
Chinese startup Le Le Gaoshang Education Technology released a “Native Language Star” brand translating gadget aimed at Chinese parents with limited English to teach English to their own children.
The contraption, which is looped around the back of a user’s neck like a travel neck pillow and comes down toward the chest, has a sort of muzzle unit that goes over the mouth and mutes the user’s own voice.
The unit is embedded with Tencent and iFlyTek AI and is billed as a way to turn an English-speaking Chinese parent into a “laowai,” or foreigner. It retails for $420.
Having so many hardware touchpoints helps with adoption and with getting people used to the technology. It’s also a boost for companies to gather a war chest of data compared to other countries, analysts say.
“When you still hear people outside of China talking about what the future of the AI device might be, the market is full of AI devices here already,” tech consultant Tom van Dillen of Greenkern said at his office in Beijing. “This creates this feedback loop again to make the AI even better.”
Yet an edge in hardware is far from a guarantee to win the AI race, especially if China’s AI lacks appeal with global customers due to privacy or other issues, or if it falls well behind its counterparts in the U.S. or elsewhere.
“You really have to be that Apple iPhone to reap the most of the reward,” Lee cautioned, referencing late entrepreneur Steve Jobs’ invention that is often seen as one of the most transformative consumer products ever. “I think the China advantage for building the Apple iPhone for the AI age is that the capabilities are there — engineers and entrepreneurs, and so on. But it will still be a race.”
Technology
Trump greenlights Nvidia H200 AI chip sales to China if U.S. gets 25% cut, says Xi responded positively
President Donald Trump on Monday said Nvidia will be allowed to ship its H200 artificial intelligence chips to “approved customers” in China and elsewhere, on the condition that the U.S. gets a 25% cut.
Chinese President Xi Jinping “responded positively” to the proposal, Trump wrote in a Truth Social post.
The policy “will support American Jobs, strengthen U.S. Manufacturing, and benefit American Taxpayers,” Trump wrote.
“The Department of Commerce is finalizing the details, and the same approach will apply to AMD, Intel, and other GREAT American Companies,” he added in the post.
Both Nvidia and chip rival AMD, short for Advanced Micro Devices, agreed in August to share 15% of the revenue from China chip sales with the U.S. government. But around that same time, China reportedly warned companies against using the H20 AI chip that Nvidia designed especially for the country.
The H200 is a higher-grade chip than the H20, but not the company’s top-of-the-line product.
Nvidia shares climbed earlier Monday on news that the Commerce Department was set to approve the China sales, but later pared those gains. The stock rose about 2% after hours.
Nvidia (NVDA) and Advanced Micro Devices (AMD) stock prices
“We applaud President Trump’s decision to allow America’s chip industry to compete to support high paying jobs and manufacturing in America,” a spokesman from Nvidia told CNBC in a statement.
“Offering H200 to approved commercial customers, vetted by the Department of Commerce, strikes a thoughtful balance that is great for America,” the spokesman said.
Semiconductors, which are key components in nearly every category of electronics, are at the center of the AI race between the U.S. and China.
They have also played a role in the tumultuous trade relationship between the two economic superpowers.
When Beijing imposed export controls on rare-earth minerals, which are used in the production of some high-end chips, the Trump administration threatened to massively increase tariffs on U.S. imports from China.
After meeting in South Korea in late October, Trump and Xi struck a tentative trade truce in which China committed to end “retaliation” against U.S. chipmakers, according to the White House.
Trump said after that meeting that he discussed the export of Nvidia chips with Xi.
— CNBC’s Kristina Partsinevelos and Kif Leswing contributed to this report.
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