Duolingo Faces Class-Action Lawsuit Over AI, Ads
Investors allege Duolingo executives misled them about monetization strategies and AI features that harmed user growth.
The popular language-learning app Duolingo is the subject of a class-action lawsuit filed earlier this month, accusing its executives of misleading investors about the company's monetization efforts and artificial intelligence initiatives.
The suit, filed in the US District Court for the Western District of Pennsylvania by Levi & Korsinsky, LLP, targets investors who acquired Duolingo shares between May 2, 2025, and February 26, 2026. Plaintiffs allege that Duolingo executives deliberately concealed the negative impact of aggressive advertising and the implementation of low-quality AI features on user growth, while publicly emphasizing their commitment to expanding the user base.
According to the lawsuit, Duolingo frequently required free users to watch unskippable advertisements after each lesson. The company also promoted paid subscription tiers, Super and Max, to the extent that free users might spend as much time viewing ads as they did on lessons. The suit claims this strategy led some users to abandon long-standing participation streaks to avoid the intrusive advertising and monetization push.
The lawsuit further alleges that Duolingo replaced its previous 'Hearts' system with a new 'Energy' feature as another tactic to drive monetization. Under the prior system, free users lost hearts for incorrect answers, and if their hearts depleted, they had to wait for replenishment before continuing. The Energy system, however, depletes energy with both correct and incorrect answers, necessitating more ad views or a premium subscription for full replenishment. The suit asserts that the company's undisclosed objective was to create friction for free users, pushing them towards paid subscriptions.
These alleged actions stand in contrast to public statements made by Duolingo executives. The suit claims that while executives were telling investors they prioritized user engagement and Daily Active User (DAU) growth, their actual strategy involved implementing features that frustrated users. Duolingo CEO Luis von Ahn is quoted in the lawsuit stating that the company's primary focus was user engagement, and that any user frustration would cause them to leave, thus necessitating the smoothing out of such issues. He also emphasized DAU growth as a critical metric.
Despite assurances that AI features were intended to improve user experience and lessons, the lawsuit accuses the company of deploying "low-quality AI content" that alienated users. This alleged strategy reportedly contributed to a slowdown in DAU growth, with a 36% increase reported in November 2025, a decrease from previous quarters, which led to a 25% drop in stock price. Further stock declines followed subsequent announcements, including the resignation of the CFO and continued forecasts of slowing growth.
Founded in 2011, Duolingo offers instruction in over 40 languages, along with subjects like math and chess, through a gamified approach. The app provides a free basic version and offers premium tiers: Super Duolingo and Duolingo Max, which include ad-free usage, unlimited energy, and AI-powered features like conversational role-playing.
The lawsuit contends that even paying subscribers were subjected to aggressive upselling for the Max tier. Duolingo has not immediately responded to requests for comment.