Microsoft is facing a new class action lawsuit from consumers who claim the tech giant illegally inflated prices for artificial intelligence services through its exclusive partnership with ChatGPT maker OpenAI.
The complaint, filed in federal court in San Francisco, accuses Microsoft of using its cloud computing deal with OpenAI to restrict access to the processing power needed to run ChatGPT. The alleged restraint, the plaintiffs say, violated U.S. antitrust law by reducing competition and driving up subscription costs for millions of AI users.
Microsoft has invested more than $13 billion in OpenAI since 2019, when it announced the first phase of a long-term collaboration to develop supercomputing systems on its Azure cloud platform. OpenAI, originally founded as a nonprofit in 2015, has since restructured into a for-profit company.
According to Reuters, the plaintiffs argue that Microsoft’s early agreement allowed it to control OpenAI’s resources, profit from its growth, and prepare rival products such as its Copilot AI platform. They also claim that ChatGPT’s prices rose sharply compared to competitors during a recent industry price war.
The lawsuit describes Microsoft’s influence over OpenAI as “a sword of Damocles” hanging over one of its biggest competitors. Although OpenAI began purchasing computing power from Google in June, the plaintiffs say the restrictive terms of the original deal still linger.
Microsoft said it was reviewing the case but defended its partnership, stating that it “promotes competition, innovation, and responsible AI development.” OpenAI, which is not named as a defendant, declined to comment.
The plaintiffs seek damages for alleged overcharges dating back to ChatGPT’s launch in November 2022, and a court order preventing Microsoft from reimposing the disputed restrictions.
