In short
- Microsoft allegedly used an unique Azure settlement from 2019 to manage compute provide to OpenAI, protecting ChatGPT costs artificially excessive whereas creating competing AI merchandise.
- When OpenAI started shopping for compute from Google in June 2025, token costs reportedly dropped 80 p.c inside weeks, which plaintiffs say is proof of the restraint.
- The lawsuit seeks damages for overcharges from November 2022 to February 2025, warning Microsoft nonetheless holds contractual energy to throttle OpenAI’s provide.
ChatGPT customers have accused Microsoft of “mercilessly” choking OpenAI’s compute provide via an unique cloud settlement, artificially inflating AI subscription costs whereas concurrently speeding its personal competing merchandise to market.
The lawsuit, filed Monday in San Francisco federal court docket, alleges Microsoft “secretly turned an funding right into a stranglehold,” utilizing its Azure cloud dominance to limit the computational assets wanted to run ChatGPT, protecting costs at ranges reaching “100 to 200 occasions” rivals’ charges throughout a February 2025 AI value warfare.
Eleven ChatGPT Plus subscribers introduced the case, alleging they overpaid for subscriptions and acquired degraded service from November 2022 via February 2025 as a consequence of Microsoft’s anticompetitive conduct.
The lawsuit calls the case “a sequel to U.S. v. Microsoft,” invoking the corporate’s Nineties antitrust battles and characterizing it as a “recidivist violator” that has “ported the identical exclusionary playbook into AI.”
Microsoft’s 2019 deal gave unique rights to produce Azure compute to OpenAI’s business fashions, successfully giving the corporate contractual management over a “horizontal competitor’s provide chain” whereas it constructed its personal generative AI merchandise, based on the submitting.
The plaintiffs outline a brand new antitrust market, the Client Generative AI Market, encompassing subscription merchandise like ChatGPT Plus, Claude Professional, Gemini Superior, and DeepSeek Chat.
Microsoft reportedly holds a 49% stake in OpenAI’s for-profit arm and takes 20% of its paid-product income, the lawsuit alleges, successfully “profiting twice—first from compute gross sales, and once more from the very AI product it constrains.”
When OpenAI started buying compute from Google Cloud in June 2025, ending Microsoft’s exclusivity, ChatGPT token costs dropped 80 p.c inside weeks, based on the criticism.
A ‘highly effective experiment’
The criticism calls it a “highly effective pure experiment” exhibiting Microsoft’s “anticompetitive restraint,” noting that earlier than the shift, ChatGPT customers confronted “poor high quality, unreleased improvements, and gradual response occasions.”
“On proof, the strongest proof can be the unique settlement itself,” Navodaya Singh Rajpurohit, authorized associate at Coinque Consulting, advised Decrypt. “If that doc reveals Microsoft held or used management over OpenAI compute, that’s main proof. If it isn’t out there, inner emails and capability information can nonetheless carry the case.”
“Restraint of commerce activates management,” Rajpurohit stated, including the declare is robust if Microsoft truly exercised or clearly held that management, however weaker if it didn’t.
The criticism additionally alleges Microsoft “nonetheless retains the contractual capacity to limit OpenAI’s compute purchases,” an influence that lingers “as a sword of Damocles over OpenAI, wielded by one in every of its principal rivals.”
Plaintiffs are looking for financial damages and a everlasting injunction barring Microsoft from unique compute offers with OpenAI, together with disclosure of inner communications on compute provide, pricing, and integration.
“The court docket can do greater than fantastic the corporate,” Rajpurohit defined. “It might probably order modifications to the OpenAI association, take away unique phrases, and set guardrails that stop future choke factors.”
The category-action arrives amid shifts within the Microsoft-OpenAI relationship. Japan’s SoftBank is reportedly negotiating to speculate as much as $25 billion in OpenAI, surpassing Microsoft’s $13 billion stake. In the meantime, Microsoft has agreed beneath the Stargate undertaking to finish its unique cloud supplier standing.
Microsoft and OpenAI didn’t instantly reply to Decrypt’s requests for remark.
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