Last week, Microsoft was sued in Samuel Bryant et al. v. Microsoft Corp., a proposed antitrust class action filed in the U.S. District Court for the Northern District of California (Case No. 3:25-cv-08733). The lawsuit, brought by 11 consumers, challenges Microsoft’s high-profile partnership with OpenAI and accuses the company of using its cloud and investment agreements to restrict competition in the fast-growing field of artificial intelligence.
The plaintiffs claim Microsoft required OpenAI to run its AI workloads exclusively on Microsoft’s Azure cloud platform, and that this gave Microsoft an anticompetitive ability to limit compute supply for OpenAI. According to the complaint, this arrangement drove up prices for generative AI services like ChatGPT, slowed product innovation, and harmed consumers by reducing competitive pressure. The plaintiffs point to OpenAI’s subsequent move to obtain compute from another major cloud provider as evidence that opening the market quickly improved performance and reduced costs. They seek damages, including treble damages under federal antitrust law—and an injunction to prevent Microsoft from re-imposing similar restrictions.
From a legal standpoint, the case raises several key issues. Plaintiffs must show they suffered a competition-related injury that antitrust laws are designed to prevent, not just general dissatisfaction with pricing. They will also need to establish that Microsoft had sufficient market power in AI infrastructure or services to restrain competition. Microsoft, in turn, is expected to argue that its exclusivity provisions were pro-competitive, ensuring security, integration, and reliability, and that pricing was dictated by broader market factors such as GPU shortages and the natural evolution of AI services.
The litigation raises the question of whether control over cloud compute capacity, acting as a chokepoint in AI markets, can be the basis for antitrust claims related to the pricing of AI. Access to vast computing resources is critical for developing and deploying large language models, and exclusivity agreements between AI developers and cloud providers could significantly shape who can compete. If a court accepts the plaintiffs’ theory, exclusivity clauses in AI-cloud partnerships may be treated with heightened skepticism, forcing companies to rethink their infrastructure strategies.
Antitrust cases often center on rival businesses, but if consumers are harmed by inflated pricing caused by anticompetitive conduct then they too may bring claims. Here consumers argue they paid artificially inflated prices because of how Microsoft structured its deal with OpenAI. This could be indicative of more consumer-driven AI litigation to come, especially as generative AI tools become embedded in everyday products and services.
As this case proceeds, it could also provide indications as to how US courts are likely to treat antitrust in the AI context going forward. Regulators in the U.S. and abroad have already begun examining whether dominant firms are using their cloud and compute power to entrench themselves in AI. A private class action adds another front, potentially influencing how regulators at the FTC and DOJ frame their own investigations into AI and competition. Even if this lawsuit is dismissed or settled early, the theories advanced in the case may shape how courts, regulators, and industry participants think about exclusivity, pricing, and consumer harm in the AI era.
At Grellas Shah, we regularly guide our clients through the commercialization of their technology products, including exclusivity arrangements for their customers and investors. Should you be wondering if any of your exclusivity arrangements trigger concerns under antitrust laws, our attorneys are here to help counsel you.