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Microsoft Hit with Antitrust Lawsuit Over AI Pricing and OpenAI Deal

By  |  October 14, 2025
Microsoft Hit with Antitrust Lawsuit Over AI Pricing and OpenAI Deal

Microsoft is confronting a new class action lawsuit in San Francisco federal court that accuses the technology company of illegally driving up the cost of generative artificial intelligence services through a secretive agreement with ChatGPT creator OpenAI. According to Reuters, the lawsuit claims Microsoft leveraged its exclusive cloud computing deal with OpenAI to limit the supply of essential computing power needed to operate ChatGPT.

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    The complaint argues that Microsoft’s partnership, which has involved investments exceeding $13 billion, violated U.S. antitrust laws by restraining competition and artificially inflating subscription prices for ChatGPT. Per Reuters, the lawsuit further alleges that these practices harmed millions of consumers by reducing product quality while boosting Microsoft’s profits.

    The plaintiffs — 11 consumers — assert that Microsoft’s early deal with OpenAI allowed it to exploit the success of ChatGPT while developing competing products such as its own AI assistant, Copilot. Although the alleged restrictions have eased, the lawsuit describes them as “a sword of Damocles over OpenAI wielded by one of its principal competitors.”

    According to Reuters, Microsoft responded in a statement saying that while it is still reviewing the lawsuit, “we believe that our OpenAI partnership promotes competition, innovation, and responsible AI development.” OpenAI, which is not named as a defendant, declined to comment on the legal action. The attorneys representing the consumers did not immediately respond to media requests.

    Related: Former UK Prime Minister Rishi Sunak to ‘Advise’ Microsoft and Anthropic

    Microsoft first announced a $1 billion investment in OpenAI in 2019, forming a multi-year partnership to advance artificial intelligence research and deploy related technologies through its Azure cloud platform. OpenAI, founded in 2015 as a nonprofit, has since restructured into a for-profit company.

    The complaint also claims that ChatGPT’s subscription prices were significantly higher than competing AI services during a price war earlier this year, partly due to Microsoft’s alleged control over computing access. That control was reportedly loosened in June when OpenAI began purchasing computing power from Google, according to Reuters.

    The plaintiffs seek damages for alleged overcharges dating back to ChatGPT’s November 2022 launch, as well as a court injunction preventing Microsoft from reinstating such restrictions. The case, Samuel Bryant et al. v. Microsoft Corp., is being heard in the U.S. District Court for the Northern District of California under case number 3:25-cv-08733.

    Source: Reuters