In a recent case, users claim that Microsoft unlawfully raised prices for generative artificial intelligence through a covert deal with ChatGPT manufacturer OpenAI.
According to the proposed class action, which was filed in a federal court in San Francisco, Microsoft restricted the supply of computational resources required to run ChatGPT by using an exclusive cloud computing agreement with OpenAI.
Microsoft has so far invested almost $13 billion to OpenAI.
The complaint claimed that Microsoft’s early agreement with OpenAI violated federal antitrust law by limiting market competition, unfairly raising ChatGPT membership costs, and degrading the quality of the product for millions of customers.
While the purported limitations on OpenAI were since loosened, the complaint claimed that they are still “a sword of Damocles over OpenAI wielded by one of its principal competitors.”
A request for comment from attorneys for the 11 customers who brought the complaint and OpenAI, which is not listed as a defendant, was not immediately answered.
Microsoft originally said in 2019 that it was investing $1 billion in OpenAI, a San Francisco-based company, and that the two companies had established a multi-year collaboration to develop AI supercomputing capabilities on Microsoft’s Azure cloud computing infrastructure.
Originally established in 2015 as a nonprofit, OpenAI has now changed its organizational structure to become a for-profit business.
Microsoft allegedly took advantage of its partnership with OpenAI to capitalize on its success while developing its own rival products, such as the AI platform Copilot, according to the lawsuit.
According to the complaint, ChatGPT’s pricing during a price war earlier this year were much higher than those of its rivals.
According to the complaint, the purported restriction on OpenAI was largely removed in June when the company started buying processing power from Google.
The plaintiffs are seeking damages for claimed overcharges dating back to ChatGPT’s inception in November 2022, as well as a court order prohibiting Microsoft from reimposing the limitations.
