Jack Paul 
Lawsuit Alleges Microsoft Manipulated AI Market
Eleven ChatGPT Plus subscribers have filed a class action lawsuit against Microsoft, claiming the tech giant deliberately restricted OpenAI’s access to computational resources through an exclusive cloud agreement. The complaint, filed in San Francisco federal court, alleges Microsoft used its Azure cloud dominance to artificially inflate AI subscription prices while developing its own competing products.
According to the lawsuit, Microsoft “secretly turned an investment into a stranglehold” by controlling the computational resources needed to run ChatGPT. The plaintiffs claim this kept prices at levels reaching “100 to 200 times” competitors’ rates during a February 2025 AI price war. They allege they overpaid for subscriptions and received degraded service from November 2022 through February 2025.
Exclusive Deal Created Supply Control
Microsoft’s 2019 agreement gave it exclusive rights to supply Azure compute to OpenAI’s commercial models. The lawsuit characterizes this as giving Microsoft contractual control over a “horizontal competitor’s supply chain” while it simultaneously built its own generative AI offerings. This arrangement, according to the complaint, allowed Microsoft to profit twice—first from compute sales, and again from the AI products it was allegedly constraining.
The plaintiffs define a new antitrust market they call the Consumer Generative AI Market, which includes subscription products like ChatGPT Plus, Claude Pro, Gemini Advanced, and DeepSeek Chat. They draw parallels to Microsoft’s 1990s antitrust battles, calling the company a “recidivist violator” that has “ported the same exclusionary playbook into AI.”
Natural Experiment Reveals Impact
Perhaps the most compelling evidence in the case comes from what happened when OpenAI began purchasing compute from Google Cloud in June 2025. The lawsuit notes that when Microsoft’s exclusivity ended, ChatGPT token prices dropped 80 percent within weeks. The complaint calls this a “powerful natural experiment” demonstrating Microsoft’s “anticompetitive restraint.”
Before this shift, ChatGPT users reportedly faced “poor quality, unreleased innovations, and slow response times.” The timing of the price drop following the end of exclusivity suggests Microsoft’s control over compute resources had been artificially inflating costs.
Legal experts note the strength of the case may depend on what the exclusive agreement actually contains. Navodaya Singh Rajpurohit, legal partner at Coinque Consulting, told Decrypt that “if that document shows Microsoft held or used control over OpenAI compute, that is primary proof.” Without the agreement itself, internal emails and capacity records could still support the claims.
Ongoing Market Changes
The lawsuit arrives amid significant shifts in the Microsoft-OpenAI relationship. Japan’s SoftBank is reportedly negotiating to invest up to $25 billion in OpenAI, which would surpass Microsoft’s $13 billion stake. Meanwhile, Microsoft has agreed under the Stargate project to end its exclusive cloud provider status.
However, the complaint alleges Microsoft “still retains the contractual ability to restrict OpenAI’s compute purchases,” describing this power as “a sword of Damocles over OpenAI, wielded by one of its principal competitors.”
Plaintiffs are seeking monetary damages and a permanent injunction barring Microsoft from exclusive compute deals with OpenAI. They also want disclosure of internal communications regarding compute supply, pricing, and integration. The court could potentially order changes to the OpenAI arrangement, remove exclusive terms, and establish guardrails to prevent future market manipulation.
Microsoft and OpenAI have not yet responded to requests for comment on the lawsuit. The case represents one of the first major legal challenges to the emerging generative AI market structure and could set important precedents for how cloud providers and AI developers interact in this rapidly evolving space.