https://wccftech.com/airpods-lossless-streaming-through-new-audio-format/

When Apple Music introduced Lossless audio support for subscribers, it was viewed as a massive upgrade, but sadly, there was a catch. Apple later confirmed that the AirPods Max did not support Lossless or Hi-res Lossless streaming, meaning none of the in-ear AirPods models did either. However, Apple might have something in the works, with a rumor claiming that a proprietary high-fidelity audio is in the works that will enable Lossless music streaming.

Currently, AirPods cannot stream lossless music, but prolific leaker Jon Prosser says that this could change with an update. All the AirPods line use lossy AAC format over Bluetooth to stream audio and cannot stream lossless ALAC or FLAC files. First reported by AppleTrack, Prosser says that Apple could release a new audio format that improves lossless streaming.