Consumers have filed a proposed class action in San Francisco federal court, alleging Microsoft used a secret cloud computing agreement with ChatGPT maker OpenAI to limit the supply of computational resources needed to operate generative AI systems.
Microsoft has invested more than $13 billion in OpenAI.
The lawsuit claims Microsoft’s early deal with OpenAI violated federal antitrust laws by restricting competition and inflating ChatGPT subscription prices, which allegedly reduced product quality for millions of users.
Although some restrictions have since eased, the filing says they remain “a sword of Damocles over OpenAI wielded by one of its principal competitors.”
Microsoft said in a statement that it was still reviewing the complaint but added, “we believe that our OpenAI partnership promotes competition, innovation, and responsible AI development.”
OpenAI, which is not named as a defendant, declined to comment. Attorneys representing the 11 consumers who brought the case did not immediately respond to requests for comment.
Microsoft first announced a $1 billion investment in OpenAI in 2019, forming a multi-year partnership to develop AI supercomputing on its Azure cloud service.
Founded in 2015 as a nonprofit, OpenAI later restructured as a for-profit company.
The lawsuit alleges Microsoft used its agreement with OpenAI to profit from ChatGPT’s success while developing rival tools, including its Copilot platform.
It also claims ChatGPT prices were significantly higher than competitors’ during a price war earlier this year.
According to the filing, OpenAI began buying compute power from Google in June, partially lifting the alleged restraint.
The plaintiffs are seeking damages for overcharges dating back to ChatGPT’s November 2022 launch and a court order to prevent Microsoft from reinstating the restrictions.
The case is Samuel Bryant et al v. Microsoft Corp, US District Court, Northern District of California, No. 3:25-cv-08733.