GitLab and its execs sued again and again over 'misleading' AI hype, price hikes

For the third time in five months, GitLab or its execs have been sued over allegedly misleading investors about AI capabilities and demand. The initial complaint [PDF], a federal securities investor lawsuit, was filed on September 9, 2024, and subsequently amended [PDF] with more detail on February 5, 2025. Soon after, two …

[Anonymous Coward]

Colour me surprised ... who would have thought ... AI & Hype TOGETHER !!!???

See ^^^^^^^^^^

:)

[elDog]

Apparently gitlab relied on its "AI" masters to write the sales pitch for its "AI"

Nothing like getting a self-serving robot to decide what is best for its existence.

Is gitlab going to divulge how many dollars/efforts it expended to implement this? (That is a question to the chatGPT embedded within.)

[Richard 12]

Why litigate?

The complaint seems to be that the management screwed up, as they don't understand their market. At all, in fact.

So, fire them. That's supposed to be the point of the Board and the power of the shareholders.

Suing just burns money that could be paid as dividends later, it's self defeating by their own rules.

[that one in the corner]

Re: Why litigate?

Shush.

*We* want them to sue - that can lead to all the paperwork, showing that foisting the AI on their users was a bad idea, into the public record. With luck, including correspondence with other peddlers that shows they were also of the same opinion, opening up a crack there. Fingers crossed.

Suing also makes for nice juicy news stories, that can drag on a bit, keeping fresh in the public mind (and the minds of the AI peddlers en masse) that this stuff is not living up to the hype.

[Rich 2]

Re: Why litigate?

Unfortunately, it never works like that

Any legal action that involves an American tech company always ends in sine out-of-court settlement and some wanky press release about not admitting guilt/blame/responsibility.

Out-of-court settlements should be made illegal once the court process has started - it just allows the status quo to persist and means that nobody is ever brought to account for being shite

[IGotOut]

Re: Why litigate?

"Suing just burns money that could be paid as dividends later, it's self defeating by their own rules."

So, so innocent.

Buy shares, sue, win money, sell shares, profit.

[doublelayer]

Re: Why litigate?

The theory of litigating is that you fire people for making mistakes and you sue them for deliberately lying. They allege that there were deliberate lies here.

You benefit from litigating in two ways:

1. Some of these suits seek to take money from the executives personally and return it to the company, from which it can be used to pay dividends. If you just fire executives, you can't do that.

2. If you are the people who started the lawsuit, you get more money than the average member of the class. That means you can get more cash at the cost of the investors who didn't start it with you.

Litigation like this can occur for valid reasons or out of greed and it can be damaging to the company or it can actually make improvements by eliminating malpractice. Which attributes this has will depend on the merits of the case.