Antitrust Lawsuit Claims Microsoft Has Artificially Inflated ChatGPT Prices

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A proposed class action lawsuit alleges that Microsoft has caused OpenAI customers, namely ChatGPT subscribers, to pay artificially inflated prices by unlawfully constraining the computing capacity of its horizontal competitor’s products, namely through an exclusivity clause in a “secretive agreement” signed early into OpenAI’s development that effectively imposed an anticompetitive price floor, and thus a cap on output and quality, for ChatGPT.

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The 99-page lawsuit claims that Microsoft has harmed ChatGPT subscribers and other consumer generative AI (CGAI) purchasers by “mercilessly choking OpenAI’s compute supply,” which served to inflate OpenAI’s prices while Microsoft rushed to ready its own AI products, including Copilot. Specifically, the suit says, Microsoft wielded an exclusivity clause in the apparently secretive agreement with OpenAI that controlled the company’s source of compute, an input required to train and run AI models.

Per the antitrust lawsuit, the agreement into which OpenAI entered early in its corporate development included a clause requiring the company’s generative AI products to exclusively use Microsoft’s Azure cloud product for compute services, giving the defendant the contractual ability to squeeze OpenAI’s output as it stood as the “far-and-away market leaders” in the consumer generative AI market.

“And that is exactly what Microsoft did,” the suit summarizes. “As demand for OpenAI’s ChatGPT product skyrocketed, Microsoft exercised its control over compute supply to restrict output to ChatGPT customers, causing massive price inflation for OpenAI tokens (the price charged API users to access the OpenAI models that drive ChatGPT) and corresponding degradations in quality, speed, sophistication, and product choice,” the suit summarizes.

Related Reading: OpenAI, Microsoft Used Copyrighted Nonfiction Works to Train ChatGPT, Class Action Claims

Initially, OpenAI signed with Microsoft to forge a mutually beneficial partnership built on Microsoft’s resources and expertise and OpenAI’s research and development, the complaint says. However, with the demand for ChatGPT skyrocketed, the case relays, Microsoft began to highly limit the product’s capabilities for premium users while also rolling out its own CGAI product, Copilot.

In early 2025, a price war broke out between subscription-based AI models as competition rose, and because of the previously imposed inflation, the costs of OpenAI’s plans remained 136 to 200 times the price of its competitors, the lawsuit says.

When Microsoft agreed to relax some of its restraints this past June, OpenAI was permitted to purchase compute and processing tools from Google, the lawsuit goes on. With this, prices immediately dropped by 80 percent, and ChatGPT immediately launched the long-awaited image generation systems along with other powerful models, the suit says.

“This was a powerful natural experiment confirming the serious, direct economic impact of Microsoft’s anticompetitive restraint on OpenAI’s generative AI products, principally ChatGPT,” the case states.

Though this change in the agreement improved user experience, the plaintiffs, a group of ChatGPT subscribers, contend that it has not made up for the lost expenses and resources of ChatGPT subscribers, especially before June 2025. Moreover, “... Microsoft still retains the contractual ability to restrict OpenAI’s compute purchases, and thereby to control its horizontal competitor’s output in the Consumer Generative AI Market,” the lawsuit mentions.

The Microsoft AI antitrust class action lawsuit looks to cover any United States resident, business, association, corporation or entity that purchased subscriptions to ChatGPT from November 30, 2022 to June 10, 2025.

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