The Trade Desk Faces Class Action Lawsuit Over AI Tool Rollout Challenges

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On Wed, 5 Mar, 8:08 AM UTC

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Multiple law firms have filed class action lawsuits against The Trade Desk, Inc. for alleged securities law violations related to the rollout of their AI forecasting tool, Kokai. Investors who purchased shares between May 9, 2024, and February 12, 2025, are encouraged to join the lawsuit before the April 21, 2025 deadline.

Class Action Lawsuit Filed Against The Trade Desk

The Trade Desk, Inc. (NASDAQ: TTD), a prominent player in the digital advertising technology sector, is facing multiple class action lawsuits alleging securities law violations. The lawsuits, filed by several law firms including The Gross Law Firm, Rosen Law Firm, and Levi & Korsinsky, LLP, claim that the company made false and misleading statements regarding the rollout of its AI forecasting tool, Kokai 123.

Allegations and Class Period

The class action lawsuits cover a period from May 9, 2024, to February 12, 2025. During this time, The Trade Desk is accused of:

  1. Experiencing significant, self-inflicted execution challenges in rolling out Kokai, including difficulties in transitioning clients from the older Solimar platform 4.
  2. Meaningfully delaying the Kokai rollout due to these execution challenges 5.
  3. Negatively impacting the company's business operations and revenue growth due to the inability to effectively execute the Kokai rollout 12.
  4. Making materially false and misleading statements about the company's business, operations, and prospects 3.

Impact on Investors

The lawsuits claim that when the true details about the Kokai rollout challenges entered the market, investors suffered damages. As a result, shareholders who purchased The Trade Desk's Class A common stock during the specified period may be entitled to compensation 23.

Legal Proceedings and Deadlines

Multiple law firms are encouraging affected investors to join the class action lawsuit:

  1. The deadline for investors to seek appointment as lead plaintiff is April 21, 2025 123.
  2. Investors can join the lawsuit without upfront costs through contingency fee arrangements 2.
  3. No class has been certified yet, and investors are not required to retain counsel or serve as lead plaintiffs to participate in any potential recovery 3.

The Trade Desk and Kokai

The Trade Desk is known for its digital advertising technology, and Kokai represents its venture into AI-powered advertising solutions. Kokai is described as a generative AI forecasting tool designed to enable users to deploy advertising spending more effectively 25.

Implications for the AI and AdTech Industries

This lawsuit highlights the challenges companies face when implementing advanced AI technologies in established business models. It underscores the importance of managing investor expectations and maintaining transparency during significant technological transitions 45.

As the case unfolds, it may have broader implications for how AI companies communicate about product rollouts and the potential risks associated with integrating AI solutions into existing platforms. The outcome could influence future disclosure practices in the rapidly evolving AI and advertising technology sectors.

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