Class action lawsuit filed against Upstart over misleading AI loan model claims

A class action lawsuit was filed against Upstart Holdings, alleging the company misled investors about the accuracy and performance of its AI lending model, Model 22. The lawsuit claims Upstart overstated the model's ability to approve loans and generate revenue, failing to disclose that the model was overly conservative and negatively impacted financial results. The issue came to light after Upstart's Q3 2025 earnings revealed the model's poor performance, leading to a revenue guidance revision and a drop in stock value. Investors who bought shares between May and November 2025 are encouraged to consider legal action before the June 8, 2026 deadline.