Microsoft Accused of Inflating ChatGPT Prices in Lawsuit

A new proposed class-action lawsuit filed on Monday accuses Microsoft Corp. of violating federal and California antitrust laws. The suit alleges that by strategically restricting computing power to its partner OpenAI, Microsoft caused the AI firm to charge users significantly more for its ChatGPT service—reportedly up to 200 times more than competitors.

The Billion Dollar Deal Under Scrutiny

The legal challenge centers on a years-old, clandestine agreement where Microsoft invested $13 billion into OpenAI. According to the allegations, this deal came with a critical stipulation: it required the creator of ChatGPT to exclusively use Microsoft's infrastructure for all its processing, memory, and storage needs. This arrangement effectively locked OpenAI into Microsoft's ecosystem, limiting its ability to seek more competitive or efficient computing resources elsewhere.

Impact on ChatGPT Users and Prices

The lawsuit claims this exclusive partnership has been detrimental to both OpenAI and the end-users of its generative AI products since ChatGPT's public release in late 2022. The complaint argues that Microsoft was "mercilessly choking OpenAI’s compute supply" while simultaneously developing its own competing AI products. This forced OpenAI to pay higher-than-necessary prices for its essential computing power, with those inflated costs ultimately being passed on to consumers, as detailed in the legal complaint.