C3.ai misled investors on CEO's health, revenue growth potential.

• C3.ai faces securities class action lawsuit over misleading statements. • CEO's health issues hindered deal closures and operations. • Management concealed material adverse facts. • Disappointing Q1 FY2026 results and revenue cut triggered the lawsuit.

C3.ai, Inc. (NYSE: AI) has been hit with a securities class action lawsuit, styled Liggett Sr. v. C3.ai, Inc., et al., No. 3:25-cv-07129 (N.D. Cal.), after the company reported disappointing preliminary financial results for its Q1 2026. The lawsuit, filed on August 29, 2025, alleges that C3.ai and its executives misled investors by making overly positive statements while concealing material adverse facts, particularly concerning CEO Thomas Siebel’s health issues.

The lawsuit, led by Hagens Berman, a national shareholder rights firm, seeks to represent investors who purchased or otherwise acquired C3.ai securities between February 26, 2025, and August 8, 2025 [1]. The class period extends from February 26, 2025, to August 8, 2025, with a lead plaintiff deadline of October 21, 2025 [1].

During the February 26, 2025, Q3 2025 earnings call, Siebel assured investors that his health was excellent and that he was fully engaged in managing the business. However, subsequent earnings calls and public statements revealed that Siebel’s health issues were having a significant adverse impact on the company’s ability to close deals and manage operations. On July 24, 2025, C3.ai announced the initiation of a search for a successor to Siebel, who assured investors that he would remain fully engaged as CEO [1].

The complaint alleges that C3.ai made false and misleading statements about Siebel’s health and its impact on the company’s financial performance. It also alleges that management failed to disclose crucial information about the true state of the company’s growth, including the impact of Siebel’s health on deal closures [1].

Investors learned the truth on August 8, 2025, when C3.ai reported preliminary Q1 2026 financial results that missed revenue estimates by a significant margin. The company reported preliminary revenue of $70.2 million to $70.4 million, far below the $100 million - $109 million revenue guidance given in May 2025 [1]. Siebel acknowledged that his health issues prevented him from participating in the sales process as actively as he had in the past, stating that it was now apparent that his active participation in the sales process may have had a greater impact than previously thought [1].

The lawsuit seeks to hold C3.ai accountable for the misstatements and omissions that led to significant losses for investors. Hagens Berman is encouraging investors who suffered substantial losses to submit their losses now and persons with knowledge who may be able to assist in the investigation to contact its attorneys [1].

C3.ai’s stock has fallen nearly 40% since July 31, 2025, raising concerns among investors about the company’s future prospects. The earnings disaster and leadership uncertainty are legitimate red flags, but the company’s cash reserves and strategic partnerships offer a lifeline. The key question for investors is whether the new leadership team can stabilize operations and reignite growth [2].

C3.ai faces a challenging road ahead, with the lawsuit and disappointing financial results testing investor confidence. The company must navigate the uncertainty surrounding Siebel’s health, the search for a permanent CEO, and the impact of these issues on the company’s financial performance.

References:
[1] https://www.morningstar.com/news/globe-newswire/9520552/c3ai-inc-ai-hit-with-securities-class-action-after-shares-crash-25-on-large-revenue-miss-hagens-berman
[2] https://www.ainvest.com/news/c3-ai-40-stock-collapse-buyable-dip-warning-sign-2508-18/